Eightchains

Long BTC - $41,900 to $45,000

Long
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BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
I opened a long position at $41,900. In the 3 hour, I saw that we were nearing resistance in the linear regression channel and nearing the resistance cluster established on Feb 4-6. The green EMA and red sRSI both turned up and, importantly, the green EMA contacted the red sRSI, while the red sRSI was moving upward. The price has moved to the upper boundary of the linear regression channel, which serves as resistance. Note how easily the price moved upward on the green shaded bar, at least in comparison to the downward movement of the red shaded bar. There was a significant move downward on the red shaded bar, but it occurred on much greater volume than that observed with the green shaded bar. The blue shaded bars indicate an important area of resistance.
In the 6 hour, the BTC price has met resistance at the upper boundary of the linear regression channel. However, notice the upswinging sRSI and blue LSMA . Based on this information, one might be inclined to think that the BTC might push up higher to around $43,500. Again, note that the blue shaded bars indicate an important area of resistance.

In the 12 hour, please note the purple shaded up bar – the one with high volume and spread. The close of that bar should serve as support. The close of that bar coincides nicely with the lower boundary of the linear regression channel. The support at that level makes me confident in opening my position at $41,900 as it is likely that the BTC price will not fall below the support given by the close of the purple shaded bar. The red sRSI and blue LSMA are swinging up, suggesting continuation of the price to the upside.

In the black oval, you can see that the red sRSI was contacted and crossed by an upswinging green EMA . At the same time, the BTC price was near the lower bound of the linear regression channel. It appears that the sRSI is flattening out and may swing upward again.

So there are two options with this trade:

(1) Close the trade and take some profit (around $43,500; 3.8% profit).
(2) Keep the trade open until a higher target is reached (e.g., around $45,000).

I am going with option #2.

This is not financial advice. I am not your financial advisor. This is my opinion.
Comment:
I closed this trade at $44,400. I will note here a few observations:

1. In the 12 hour timeframe, we observe that the red sRSI is greater than 50. When this occurs, we should observe the BTC price above the Bad Ass Bollinger Band basis (the 21 EMA), which $43,178 at the moment.
2. In the 1 hour timeframe, I observed a shortening of the thrust (SOT), a Wyckoffian concept. SOT refers to successive diminished upward spread on successive candles. This was occurring with an increase in volume, so this activity reflects a diminished momentum. That is, there is less result (price movement to the upside) with greater effort.
3. Like the 1 hour timeframe, I also observed a SOT and a loss of momentum.
Trade closed: target reached:
Open: $41,900
Closed: $44,400
Price change: +6.0%