Key levels
Short term
Supports—> S1: 9,900 & S2: 9,300
Resistances—> R1: 11,000 & R2: 11,800
Medium term
Supports—> S3: 8,800 & S4: 8,200
Resistances—> R3: 12,300 & R4: 13,000
Potential scenario
It has been almost three months since Bitcoin made its sixteen months high, and it is still trapped in a very bearish scenario. The Bitcoin price has been continuously making lower highs, as we can see in the chart with red circles.
Many traders are discussing that the price is making a descending triangle. What is it? As the name suggests, it is a bearish triangle. They are formed when the upper part of it makes lower lows and the price is putting a lot of pressure on the support (base of the triangle).
Frequently, descending triangles, once they are almost completed experience very low volatility. Once the price is at the apex of the triangle a sudden rush in volatility causes a break downward. The triangle can be completed in around a week. Which means that there can be a sharp and large move very soon.
TA comment
As argued in the section "Potential scenario", Bitcoin could be on the edge of making a very sharp move, once the triangle is almost completed. In order to automate and take advantage of this potential scenario, we can select two indicators. We have selected the DMI to generate buy or sell signals and the Cryptohopper ATR, an indicator we have developed in our office and soon available in our platform. This indicator allows us to open a trade based on DMI only whenever the ATR is above 2% volatility level.
The essence of the strategy is to open positions ONLY when the price increases its volatility and the DMI signals a buy or a sell. By including the Cryptohopper ATR to the strategy, we sort of add a volatility filter, that will prevent the hopper to open positions when our strategy signals buys or sells during sideways markets.
We have set the volatility filter at 2%, so when it goes above this level, the hopper will be able to open positions based on our indicator DMI.
In this way, it will open positions only when the volatility is back in this market.
Pattern
Regarding patterns in the chart, as we’ve discussed before, Bitcoin has been performing a huge descending triangle with a maximum at almost $14,000 and a minimum at $9,100. However, it is possible to find other patterns within the triangle.
Recently, the candlestick recognition system has spotted the pattern ''inverted hammer" when the price tested the upper band of the triangle.
An inverted hammer is a bearish reversal pattern. It is most often presented during an upward trend and as a candle with a long upper wick and a short body at the bottom. By including this pattern in your automated strategy, you can generate sell signals once this pattern appears in the chart.
Short term
Supports—> S1: 9,900 & S2: 9,300
Resistances—> R1: 11,000 & R2: 11,800
Medium term
Supports—> S3: 8,800 & S4: 8,200
Resistances—> R3: 12,300 & R4: 13,000
Potential scenario
It has been almost three months since Bitcoin made its sixteen months high, and it is still trapped in a very bearish scenario. The Bitcoin price has been continuously making lower highs, as we can see in the chart with red circles.
Many traders are discussing that the price is making a descending triangle. What is it? As the name suggests, it is a bearish triangle. They are formed when the upper part of it makes lower lows and the price is putting a lot of pressure on the support (base of the triangle).
Frequently, descending triangles, once they are almost completed experience very low volatility. Once the price is at the apex of the triangle a sudden rush in volatility causes a break downward. The triangle can be completed in around a week. Which means that there can be a sharp and large move very soon.
TA comment
As argued in the section "Potential scenario", Bitcoin could be on the edge of making a very sharp move, once the triangle is almost completed. In order to automate and take advantage of this potential scenario, we can select two indicators. We have selected the DMI to generate buy or sell signals and the Cryptohopper ATR, an indicator we have developed in our office and soon available in our platform. This indicator allows us to open a trade based on DMI only whenever the ATR is above 2% volatility level.
The essence of the strategy is to open positions ONLY when the price increases its volatility and the DMI signals a buy or a sell. By including the Cryptohopper ATR to the strategy, we sort of add a volatility filter, that will prevent the hopper to open positions when our strategy signals buys or sells during sideways markets.
We have set the volatility filter at 2%, so when it goes above this level, the hopper will be able to open positions based on our indicator DMI.
In this way, it will open positions only when the volatility is back in this market.
Pattern
Regarding patterns in the chart, as we’ve discussed before, Bitcoin has been performing a huge descending triangle with a maximum at almost $14,000 and a minimum at $9,100. However, it is possible to find other patterns within the triangle.
Recently, the candlestick recognition system has spotted the pattern ''inverted hammer" when the price tested the upper band of the triangle.
An inverted hammer is a bearish reversal pattern. It is most often presented during an upward trend and as a candle with a long upper wick and a short body at the bottom. By including this pattern in your automated strategy, you can generate sell signals once this pattern appears in the chart.