Bitcoin 4-Hour Keltner Channels

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
I was encouraged to look at shorter time frames - including the 4-hour - to see trends in the Bitcoin             . It is a good practice and I generally do look at time frames down to about the 30-minute.

As you can see by looking at the 4-hour Keltner Channels the top of the channels is around $506.45, so you may not want to get too excited by the recent price movement unless you are just looking to scalp a few dollars here or there and intend to get in and right back out. In addition, 50-day EMA is below 100-day EMA which is bearish . Until price makes a run at 50-day (and probably 100-day) I'm not looking to buy.

I tend to look at longer term time frames - the 1-day, weekly - and indicators, cycles, patterns, and Point and Figure charts. I'm not as concerned with the $50-$70 swings as my approach is looking more at medium-to-long-term price and momentum rather depending on timing to jump in and out.
I told you about the fast uptrend speed in the 1-minute chart. Are you getting bullish now in your 4-hour chart?

TerryKinder ChartArt
No, 4-hour chart KDJ is rolling over and the 4-hour Keltner Channels actually show Bitcoin price is getting ahead of itself. Not that it can't get more overextended, but it will come back down at some point.

From a cycle point of view the longer term cycles determine the long-term price trend and the shorter cycles determine the short-term trend. There is software where you can determine the individual cycles as sine waves and plot the future price.

You can also get similar - although not as precise results - just by reading the chart and counting a bottom to top of whatever your favorite indicator is. You can also look at price, of course, and roughly guesstimate upper and lower bounds of where price will go.

Unless you are a short-term trader, the short time frames will only tell you a little about where the price goes in the medium-to-long-term because the longer cycles are dominant. Yes, the longer cycles consist of shorter ones, and the short cycles can tip you off to movements in price. However, when you look at an indicator for a very short time frame that indicator will cycle up and down very quickly and will only tell you a little about where the price will be in an hour, 4 hours, a day, a week, a month, etc. To get an idea where the longer term price is going, you have to look at the long-term cycles and indicators.
+1 Reply
ChartArt TerryKinder
This is how it looks like 6 hours later. Two different versions of the same chart:

ChartArt TerryKinder
Yes, the longer-term trend are what is moving the price overall. But the short-term trends are changing the direction, especially in moments like this where long-term trends are lagging behind if the movements are very fast.
TerryKinder ChartArt
If you look at the price cycles as sine waves the longer term trends predominate. The shorter cycles can add or subtract from the trend and price movement depending if the sine waves peak or bottom at the same time. Other movements up and down are made up of different sine wave cycles moving - some roughly in sync while others are out of sync.
+1 Reply
ChartArt TerryKinder
It would be interesting to see such a sine wave. Could you provide a screenshot of a chart to explain it?
MarvinMartian TerryKinder
FWIW, I know you are referring to periodocity, but the true pattern is a square wave with a roll-off, or "ringing"

IvanLabrie TerryKinder
Great summary, you aim to trade when both short and long term point the same way, or take the countertrend short term move as an entry...
I project in my head where the EMAs might cross and it seems they can cross - that is why I am so bullish.
TerryKinder ChartArt
On the 4-hour chart I'm not seeing the 50-day crossing back over the 100-day moving average for a while. On the 1-day the 50-day just crossed under the 100-day.

On the chart below price is closer to the downward sloping Andrews' Pitchfork, so to me it currently looks more probable that price either re-enters the pitchfork which would be very bearish, or it follows the upper parallel on its downward slope which would be bearish.

On the chart below, price broke through the bottom of the large green triangle which was drawn based on the $339.79 low. Unless price either re-enters that triangle, or at least begins to hug the bottom of it, I would expect price to continue down or, at a minimum sideways, until something changes.

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