Putting 2018 and current price action side by side. Looks pretty similar, right? Well, there are some subtle differences that might help with preparing for whatever comes next. I am told i should write not a finance advice. Let's take a look under the hood. This is on a daily timeframe.
First up moving averages. I have 50 EMA and SMA in Green and Orange. 100 EMA and SMA in RED and Black. Like 2018 BTC has a cross over where orange 50 SMA crossed over Green 50 EMA right before breaking the blue downward trend line. Both then and now the bottom bolinger support pushed price up to the top side resistance. Difference is, there was a daily close below 50 EMA, where we do not have that now. SMA line moving over EMA signifies a recent downward pressure since EMA is more weighted towards recent price average. So, both have a bearish case, but 2018 had louder warning.
Next RSI. In 2018 going up to the high had a negaive divergence where price made higher high and RSI made lower high. We dont have that in 2021. It is noteworthy that BTC hasnt had a major sustained bear market without creating a negative divergence in the daily. Feel free to backtest it. So, that is hope on the bull side this time around so far.
Finally MACD. In 2018 MACD histogram turned green not at the breakout candle, but at the confirmaion candle. Confirmation candle got a doji type form and next confirmation was a failure. This time around pretty much same. It is forming a doji right now, so the next couple of days will show what gives.
So what am I thinking now? The next 2 days will tell me what to do next. If we see more sideways action slowly gaining energy under the top bolinger and maintaining distance above 50 SMA, then bulls might take the cake and 2018 is a no go for now. If price shoots up to make a higher high above 39k, even a wick, I would bet on a new ATH. If there is a breakdown, then i would watch for a closure below 50 SMA. That will be my queue to sell the bounce and wait for new clues. Price might fall to 50 SMA while EMA line crosses over. So if there is no daily close below 50 SMA that would be my buy signal and will buy more based on my strategy, not while the cross is taking place. Same, to the downside will not sell right at a close below 50 SMA. Will use my exit strategy during a bounce. For now 32k is the line on the sand and range between 35k and 39 k is a very good thing. Let's see what happens.
First up moving averages. I have 50 EMA and SMA in Green and Orange. 100 EMA and SMA in RED and Black. Like 2018 BTC has a cross over where orange 50 SMA crossed over Green 50 EMA right before breaking the blue downward trend line. Both then and now the bottom bolinger support pushed price up to the top side resistance. Difference is, there was a daily close below 50 EMA, where we do not have that now. SMA line moving over EMA signifies a recent downward pressure since EMA is more weighted towards recent price average. So, both have a bearish case, but 2018 had louder warning.
Next RSI. In 2018 going up to the high had a negaive divergence where price made higher high and RSI made lower high. We dont have that in 2021. It is noteworthy that BTC hasnt had a major sustained bear market without creating a negative divergence in the daily. Feel free to backtest it. So, that is hope on the bull side this time around so far.
Finally MACD. In 2018 MACD histogram turned green not at the breakout candle, but at the confirmaion candle. Confirmation candle got a doji type form and next confirmation was a failure. This time around pretty much same. It is forming a doji right now, so the next couple of days will show what gives.
So what am I thinking now? The next 2 days will tell me what to do next. If we see more sideways action slowly gaining energy under the top bolinger and maintaining distance above 50 SMA, then bulls might take the cake and 2018 is a no go for now. If price shoots up to make a higher high above 39k, even a wick, I would bet on a new ATH. If there is a breakdown, then i would watch for a closure below 50 SMA. That will be my queue to sell the bounce and wait for new clues. Price might fall to 50 SMA while EMA line crosses over. So if there is no daily close below 50 SMA that would be my buy signal and will buy more based on my strategy, not while the cross is taking place. Same, to the downside will not sell right at a close below 50 SMA. Will use my exit strategy during a bounce. For now 32k is the line on the sand and range between 35k and 39 k is a very good thing. Let's see what happens.
