BTCUSD Bearish Moving Averages: We are Retesting $5,800

I am not a moving average guy, but I do know the basics and even more importantly, I have come to start listening to the CM_Ultimate_MA (which I will just shorten to CM_). The CM_ is a composite of all your favorite moving averages (simple, hull, ema, etc) and it will turn green when the balance of moving averages give buy signals and it turns red when the balance of moving averages signal give sell signals. Lots of testing have shown the 13 and 48 EMAs to be optimized for trading securities (systemtradersuccess....s-which-is-the-best/) and so we will address those. Finally, I will be addressing this top and the previous two tops because the conditions are the very similar. Top 1 was a double top, top two had hidden bearish divergence (please see the linked post) compared to top 1, and top 3 has hidden bearish divergence compared to both top 1 and top 2.

So, the simplest signal we could use is the CM_ turning red on a significant timeframe and we see that it has just turned red on the 8H. In fact, this price drop has been so brutal that on the hourly charts the CM_ is red from the 1h all the way to the 11h (which no one really uses, but when we turn red on the 12 that sell signal should slap you in the face.)

The CM_ turned red on the 8h and it gave us our pronounced valley in 1 (the red oval) one and it gave us our haggard valley in top 2 (the green oval). Notice how shallow the top two valley is, and notice how the CM_ was only read for a few candle sticks before we had our other top. To me this suggest that the top we have right now may not have a double top, or perhaps the double top was really condensed into the dip we saw on the 26th. My gut tells me there is a 80%ish chance we will not double top but I am no so confident that I won’t be protecting my gains by moving my stop losses down until I am guaranteed some profit it we swing up and start to double top.

We see that for top 3 we basically cut through the 13 EMA & CM_ and found support directly on the 48 EMA as we did in both top 1 and 2. If you are swing trading, or doing some intra-day trading you will be watching to see if and how we break through the 48EMA, as we broke through on the next period for top 1 and bounced off for top 2. (red and green ovals again).

I am going to be looking for bearish cross overs of the 13 and 48 EMAs over the next couple of days. as we had in the orange and blue ovals, with the cross over occurring after several large red candles in the blue oval or long red candles and dojis as we saw in the orange oval. Moving average trading masters might have a better strategy for you but this basic strategy complements what I see with the hidden bearish divergence.

And finally, for S and giggles lets look at the 11h. We are only half way though this timeframe so the CM_ may not close red, but I have strong suspicion it will. The valley of top 1 had a significant period with the CM_ red while top 2 only had a few bars. Once again my gut tells me we are not going to double top and we will be retesting $5.8k and maybe smashing through. And despite the fact we are only half way though this timeframe we see an extraordinary amount of volume on this candle.
Not financial advice, so forth and so on but protect yourself as the reaction at $5.8 could be impulsive. We may dribble along there for who knows how long before we move impulsively one way or the other or we may spike off or blast through. My bias is capitulation will settle in, people will see we are in a descending triangle, and bags will be dumped.

I'll post this again: I think we have the market structure to ultimately go to sub $2k. We have the ichi cloud so far away and I think we will meet it or break through on the monthly time frame, and this looks a whole lot like 2014. You can still lose a whole lot of money shorting if you don't protect yourself from bounces.