Anpu

BTC | The Price is Between Two Extremes

COINBASE:BTCUSD   Bitcoin / U.S. Dollar
The fate of the price direction is depended on levels, the one is located between. To be more specific the price now is between two extremes, If the one break through any of them, it might continue to fall/rise in the direction the extreme has been broken.

In this idea we will consider these extremes. These extremes are represented by several supports/resistances on each side. Let's go through them.

Upward scenario:

For this scenario to develop we need to see the price break through several strong resistances at least. They are:
-Ichi Cloud
-$9.700 resistance level
-121 MA resistance
Since they are very close, it's better to use a zone, which will include all these levels.

Downward scenario:

Restraining factors for this scenario are:
-Candlestick with the most buying pressure
-Strong momentum

The whole situation:

There is only one candle (candlestick with the most buying pressure) which makes the Upward scenario is still relevant option. This candlestick made a strong momentum, and there is an option that this candle will form a strong support for the price. But the current behavior of the price shows that this movement is just a retracement, but not a reversal. Pay attention to that price was not even able to break through $9.700 and 121 MA resistances (fakeouts are out of count). These levels is only the first step needed to be past for the Upward scenario. And this necessary step was not past (on current).

For the Downward scenario I will give you some interesting levels, that I consider as signals of continuation of a Downtrend, in case the price will cross them.

20 MA:
20 MA is approaching to the price. And it will work either as a support or the price cross the line, which will form a bearish crossover. According to the current behavior of the price, the Bulls pressure is weakening, the resistance zone which contains $9.700 level, Ichi Cloud, and 121 MA was not broken, and lower highs are forming. It tells that there is a great chance for the bearish crossover.

Darvas Box:
Nicolas Darvas supposed that the price is moving in boxes. So when upward movement happened with high volumes, he drew the box for the price by recent highs and lows. After the box was broken, it meant the price will continue to move in that direction, if volumes conform this. In our case the volumes do not conform to the direction of the breakout movement. So the price might return to its previous box.

The downside of the Darvas box theory, is that it is less effective in declining markets. But if we summarize all the facts, I think we can use this as an extra sell signal.

Conclusion: The price had not past through one of these extremes yet. And it's to early to judge which direction the price will go. According to this TA the downward scenario is more possible.

One more: Also watch for the RSI behavior. To interpret it better, look at my previous idea.

Screenshot in addition: The Price crosses 20 MA from above during a Downtrend.

Thank you for reading this idea. I hope you find something, that might be useful to your own strategies.

Please hit the like button in case you like this idea. Also do not forget to write your own thoughts and send your charts in comments below.

Remember this analysis is not 100% accurate. No single analysis is. To make a decision follow your own thoughts.

The information given is not a Financial Advise.
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Good idea!
+1 Reply
Anpu Moiseiev_Yurii
@Moiseiev_Yurii, Thanks!
Reply
Anpu Moiseiev_Yurii
@Moiseiev_Yurii, It is very nice to hear!
Reply
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