JacobR905

Bitcoin Possible Reversal??!

Short
COINBASE:BTCUSD   Bitcoin
Btc has been pumping recently leaving a wreck for the altcoins and we are currently on our 13th green daily candle in a row, we have come to a point thought where it seems like the momentum is fading and we are now asking if a little pullback is due for BTC? Now i have pulled up some indicators that can possibly show and signal a reversal and things on the technical side are pointing to that currently, looking at the pivot bands we notice that we have been riding up on the top red band which is the downside pivot band, as you can see previously we had the same thing occur just with less upwards movement and less consecutive candles, if you look just before the first red vertical line you see we pushed up and had many touches on the top red band and shortly afterwards we saw a strong 1-2-3 move to the downside, we do have lots of underlying support but we could be in for a little bearish short term "cycle" and by no means is this actually bearish it would simply be a healthy needed cooloff/correction. 1 thing we should watch for that is actually a good signal is the darth maul like transition candles, where the body is less than the 2 wicks above and below, an example can be found by looking down to right before we started this run upwards, you see 3 strong transition candles highlighted in purple, our current candle today is starting to look like a transition candle and especially will if we see a little more of a push to the downside before our daily close. Always keep an eye on the actual candle structure because each shape and size can be different and can all mean something different, these transition candles work both ways (bullish & bearish) Now lets take a look at the reversal momentum indicator or the RMI, this is where those vertical lines come into play, if you follow each vertical line upwards you see that they all line up perfectly with reversals in price action, red for to the downside and green for the upside reversal, now if you take a look at the actual blue and orange lines which are very similar to how the MACD works you see that we are potentially on the verge of a heavy downside reversal, and the reason i say heavy downside reversal is due to the fact that we have reached just about the top of the zone and historically when we see a push this high a heavier downside follows, now this might not be the case either, we could have a mild downside swing and then catch a reversal on the way down but we will have to wait and see before speculating too much. Now lets take a peak at the RSI the one thing that is very clear and that plays into my whole theory here is that we are very overbought and we have been since october 6th, now its also starting to look like we are seeing a bit of a downside curl in the RSI and we could potentially see a fall out of this zone in the coming days, and as i always say and will continue to say, the most important thing is the RSI midline and keeping above this level, if we do we stay in a confirmed uptrend and thats exactly what we want, just pointing that out but i definitely don't see this being an issue we are a far ways away from the midline and i don't see BTC breaking below here anytime soon! Not financial advice just my opinion!!

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.