HI friends! I received a few comments yesterday, from people wondering how I am trading this market. So, I figured I would let you all know what my plan is. Keep in mind, this information is for educational purposes only. So, without further ado, let's get to it!
Here on the daily chart, you can see that BTC appears to have found gentle support on the top of the triangle, just as we had discussed yesterday. However, right above the current trading action, we have the extremely resistive 50 EMA (in orange.) As you can see, BTC hasn't traded above the 50 EMA since the beginning of September, with a few insignificant exceptions. So, the 50 EMA is clearly the ceiling right now. Conversely, the top of the descending triangle seems to be the immediate floor. Therefore, we can see that we're in a very tight trading range. The market is coiling up in this area, and if we start to vacate it with real volume, the move could be explosive. So, here is my approach to this market.
In terms of trading, I am not trading at all right now. Choppy low volatility markets are the worst places to trade, and this movement (or lack thereof) is not my cup-o-tea. So, I'm waiting for a few conditions to materialize, before placing any trades. On the upside, I want to see BTC rally above the 50 EMA and confirm above the 200 EMA (in purple***.) If that happens, I will definitely go long with a tight stop under the 200 EMA. Technically, you can see that a higher high has been formed on the chart. I didn't mention this in yesterday's analysis, and nobody called me out on it, but I want to clarify that October 15th was technically the first higher high since the all time high. So, that is definitely something to pay attention to. Further adding to a potentially bullish case, the market is really basing out here. It's just heading sideways, with tons of support here at the bottom of the triangle, as that area converges with the rising black trendline, right around the 5,500 mark. So, if we have a sustained breakout, on nice volume, with confirmation above the 200 EMA, I will cautiously go long with a tight stop.
On the downside, I think the path is pretty clear. If BTC falls below the rising black trendline, and especially if it breaks below the bottom of the triangle (on high volume***,) I am going to short the ever loving poo out of this thing, with a stop above the breakdown point. Such a move could easily produce a fall to $3,000 or lower, based on the height of the triangle. So, I am mostly neutral on the market, until it shows us where it wants to go from here. BTC isn't in freefall anymore. At least, not right now. So, when we start to move again, and when one of those aforementioned conditions are met, I will trade BTC accordingly. For the record, it's probably most likely that BTC will continue to chop sideways, remaining mostly below the 50 EMA, until it runs into the rising black trendline.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Here on the daily chart, you can see that BTC appears to have found gentle support on the top of the triangle, just as we had discussed yesterday. However, right above the current trading action, we have the extremely resistive 50 EMA (in orange.) As you can see, BTC hasn't traded above the 50 EMA since the beginning of September, with a few insignificant exceptions. So, the 50 EMA is clearly the ceiling right now. Conversely, the top of the descending triangle seems to be the immediate floor. Therefore, we can see that we're in a very tight trading range. The market is coiling up in this area, and if we start to vacate it with real volume, the move could be explosive. So, here is my approach to this market.
In terms of trading, I am not trading at all right now. Choppy low volatility markets are the worst places to trade, and this movement (or lack thereof) is not my cup-o-tea. So, I'm waiting for a few conditions to materialize, before placing any trades. On the upside, I want to see BTC rally above the 50 EMA and confirm above the 200 EMA (in purple***.) If that happens, I will definitely go long with a tight stop under the 200 EMA. Technically, you can see that a higher high has been formed on the chart. I didn't mention this in yesterday's analysis, and nobody called me out on it, but I want to clarify that October 15th was technically the first higher high since the all time high. So, that is definitely something to pay attention to. Further adding to a potentially bullish case, the market is really basing out here. It's just heading sideways, with tons of support here at the bottom of the triangle, as that area converges with the rising black trendline, right around the 5,500 mark. So, if we have a sustained breakout, on nice volume, with confirmation above the 200 EMA, I will cautiously go long with a tight stop.
On the downside, I think the path is pretty clear. If BTC falls below the rising black trendline, and especially if it breaks below the bottom of the triangle (on high volume***,) I am going to short the ever loving poo out of this thing, with a stop above the breakdown point. Such a move could easily produce a fall to $3,000 or lower, based on the height of the triangle. So, I am mostly neutral on the market, until it shows us where it wants to go from here. BTC isn't in freefall anymore. At least, not right now. So, when we start to move again, and when one of those aforementioned conditions are met, I will trade BTC accordingly. For the record, it's probably most likely that BTC will continue to chop sideways, remaining mostly below the 50 EMA, until it runs into the rising black trendline.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-