Our framework is working fluently so far. We have fully reached our target for July, and the expected drop is manifesting itself accordingly.
Let's talk about the situation first. The 6k is holding, and we can see that the ceiling of the downward channel is acting as a support. This is good. If we ever test the 5k, I hope it happens while we're above downward channel.
Now at this moment the oscillators are at the bottom in daily chart.
RSI is about to cross its MA, and Stoch is building up pressure as it sweeps the bottom. Not shown in the picture but Fisher(9) also has a crossing however Fisher(21) and AO are not showing a trend reversal yet. Such crossing will coincide with Daily RSI crossing its MA so this will be our main indicator. Note that heikin ashi candlesticks also showing a spinning top.
It is best to think in terms of probabilities, and at this moment going down - at least for short term - is less likely.
In the 4h, we have an unfolding of a hidden bullish divergence.
However, Stoch RSI in daily is losing its steam. Should we go down, we're looking for MA in RSI acting as a support in 4h. Also, right now we are yet to see a signal for trend reversal in 4h on Ichi cloud (conversion line (CL) crossing base line (BL)).
Reversal signals
Our main signal is crossing of RSI of its MA in Daily. We also have to look for a crossing of CL through BL in 4h for a trend reversal signal. If in 4h price goes down we should look for whether MA of 4h RSI is acting as a support or not.
Positions
Remember that we don't have a clear signal yet. If we get a signal we can go long and our first stop looks like 6.8k - a ~7% gain.
Stops: Range of 5.9 - 6.1k is fine (7 - 4% loss).
We need one more day before the signal, however I think the time is nearing towards drawing of swords.
Trade active:
Finally we have all expected signals going for us:
4H: Ichi CL crossing BL, unfolding of consecutive hidden bullish divs.
D: RSI crossing its MA, Fisher(9) and (21) crossings, AO turning green below.
And just after loosening of Stoch oscillators in 4h, we bounced from the dashed redline (ceiling of downwards channel) indicating we have a buy pressure to hold the price outside of that channel.
In 4h (above) we see we're now stuck below the Ichi cloud. Unfortunately, Stoch oscillators are maxed out again. Also, 4H heikin ashi showing a bearish spinning top.
We don't do much but 1H is also overbought at this point. However Stoch oscillators have room for moving higher.
Plans:
I will suggest two ways of trading.
First is a single with a tight stop (~4-5%). We pay for upside possibility. If stops kick in, we try again.
Second, we cost average the entry and then set a stop.
Reasoning:
Daily is confident but not too confident. We could see a pump or dump. However, since daily has higher probability to go up, each down pump increases the probability of going higher. Dump is a possibility because of mixed signals in 4H and 1H.
Entry is 6.3, first target is 7k (11% profit, bottom of Ichi cloud in daily). Stops are according to two plans.
4H: Ichi CL crossing BL, unfolding of consecutive hidden bullish divs.
D: RSI crossing its MA, Fisher(9) and (21) crossings, AO turning green below.
And just after loosening of Stoch oscillators in 4h, we bounced from the dashed redline (ceiling of downwards channel) indicating we have a buy pressure to hold the price outside of that channel.
In 4h (above) we see we're now stuck below the Ichi cloud. Unfortunately, Stoch oscillators are maxed out again. Also, 4H heikin ashi showing a bearish spinning top.
We don't do much but 1H is also overbought at this point. However Stoch oscillators have room for moving higher.
Plans:
I will suggest two ways of trading.
First is a single with a tight stop (~4-5%). We pay for upside possibility. If stops kick in, we try again.
Second, we cost average the entry and then set a stop.
Reasoning:
Daily is confident but not too confident. We could see a pump or dump. However, since daily has higher probability to go up, each down pump increases the probability of going higher. Dump is a possibility because of mixed signals in 4H and 1H.
Entry is 6.3, first target is 7k (11% profit, bottom of Ichi cloud in daily). Stops are according to two plans.
Trade active:
Stoch oscillators in 4h (top) has to loosen a bit.
Daily is looking fine (bottom). When oscillators relax in 4h, that will be seen in daily as RSI bouncing off its MA. We may test 6.4k for that.
Stoch oscillators in 4h (top) has to loosen a bit.
Daily is looking fine (bottom). When oscillators relax in 4h, that will be seen in daily as RSI bouncing off its MA. We may test 6.4k for that.
Trade active:
Flushing of stoch oscillators in 4h (top) unfolding.
Daily is still looking fine (below) and has a room for cost averaging.
Flushing of stoch oscillators in 4h (top) unfolding.
Daily is still looking fine (below) and has a room for cost averaging.
Trade active:
In Daily, Stoch RSI is topped out. Fisher 9 and 21 is turning down. Therefore I'm not confident about RSI bouncing off its MA.
Same indicators in 4h however giving a potential to go higher.
Due to these interfering signals I'll go with putting stops at 6 and 5.9k for a few percent of entry.
In Daily, Stoch RSI is topped out. Fisher 9 and 21 is turning down. Therefore I'm not confident about RSI bouncing off its MA.
Same indicators in 4h however giving a potential to go higher.
Due to these interfering signals I'll go with putting stops at 6 and 5.9k for a few percent of entry.
Trade active:
Right now we still have interfering signals between daily and 4h (and 1h too).
Top graph showing 4h chart. Now, we're running out of fuel in 4h. RSI and Stoch is maxing out. However, the RSI is still above its MA, and several other indicators such as Ichi and Gator is likely to provide a support should we go down in 4h.
In Daily chart, we have room for moving higher. However, here we can see the same indicators, Ichi and Gator, acting as a resistance.
What can we do?
Our entry is not the best (best was 5.9) but we're on the plus side while daily is showing a potential to go higher. Since there's no immediate sell signal on Daily, we are on plus side and safe as we are.
To add more to our position (imagine if we were making a fresh entry right now - would we buy?) we should wait for consolidation in 1H and 4H charts. It should relax around 6.5k, turning resistance into support.
Lastly, one other thing is that Bitcoin has a mercurial nature. Just by looking at past 15 daily candlebars it is somewhat stable. This occured once in March 30th to April 11th, and before that, movements in 2015-16 while the trend was changing. We can somehow quantify that by looking at Bollinger Bands and ask where we are in the band. We're right now slowly gliding into the center of BB, which Bitcoin hates. Therefore, I'm not yet saying that we're going into a new bull cycle, but in short term we might see pumps or dumps, where former is somehow likelier (looking at daily).
Right now we still have interfering signals between daily and 4h (and 1h too).
Top graph showing 4h chart. Now, we're running out of fuel in 4h. RSI and Stoch is maxing out. However, the RSI is still above its MA, and several other indicators such as Ichi and Gator is likely to provide a support should we go down in 4h.
In Daily chart, we have room for moving higher. However, here we can see the same indicators, Ichi and Gator, acting as a resistance.
What can we do?
Our entry is not the best (best was 5.9) but we're on the plus side while daily is showing a potential to go higher. Since there's no immediate sell signal on Daily, we are on plus side and safe as we are.
To add more to our position (imagine if we were making a fresh entry right now - would we buy?) we should wait for consolidation in 1H and 4H charts. It should relax around 6.5k, turning resistance into support.
Lastly, one other thing is that Bitcoin has a mercurial nature. Just by looking at past 15 daily candlebars it is somewhat stable. This occured once in March 30th to April 11th, and before that, movements in 2015-16 while the trend was changing. We can somehow quantify that by looking at Bollinger Bands and ask where we are in the band. We're right now slowly gliding into the center of BB, which Bitcoin hates. Therefore, I'm not yet saying that we're going into a new bull cycle, but in short term we might see pumps or dumps, where former is somehow likelier (looking at daily).
Trade active:
Shorter time frames relaxed just around 6.5k.
It would've been the best if we spread some sell orders around 7k. That was a missed call on my part.
Anyway, where do we go from now?
Along with some other indicators, main downtrend signal is RSI crossing below its MA, and Fisher9 and 21 making a downcross in Daily chart.
Given daily, I still believe going up has a higher probability than going down. Also, we are safe with our entry. Target is again 7k (test of Ichi in Daily).
It would've been the best if we spread some sell orders around 7k. That was a missed call on my part.
Anyway, where do we go from now?
Along with some other indicators, main downtrend signal is RSI crossing below its MA, and Fisher9 and 21 making a downcross in Daily chart.
Given daily, I still believe going up has a higher probability than going down. Also, we are safe with our entry. Target is again 7k (test of Ichi in Daily).
Trade closed: target reached:
We reached our target of 7k.
While I believe there may be more to come according to Daily and even Weekly chart, let's be smart about our profits and take partial profits. Half of the main capital is fine for that (ultimately it's up to you).
The reasoning for that is now Stoch Oscillators are topped out in most of the timeframes. Also, with the exception of Daily, most frames are oversold. Therefore it is likely that we will see a loosening of oscillators. This will allow us to re-enter according to the situation.
Other low possibility (for BB in Daily is crossed) is that we will exhaustively pump up to 7.6k (to top of Ichi cloud).
Therefore for now, taking partial profits is fine for both scenarios.
Signals:
I think momentarily we have a sell signal.
Should we go down, the support is 6.8 - 6.9 range. This will coincide with the RSI bouncing off its MA. We will keep an eye on whether that price will act as a support closely (for possible re-entry).
First buy signal for further upwards movement is Ichi CL crossing thru BL.
Profits: Even though we had a window for ~21% profit, we (partially) have concluded this trade with ~11% profit.
We should continue with a new idea, because I still maintain my view on test of 5k.
While I believe there may be more to come according to Daily and even Weekly chart, let's be smart about our profits and take partial profits. Half of the main capital is fine for that (ultimately it's up to you).
The reasoning for that is now Stoch Oscillators are topped out in most of the timeframes. Also, with the exception of Daily, most frames are oversold. Therefore it is likely that we will see a loosening of oscillators. This will allow us to re-enter according to the situation.
Other low possibility (for BB in Daily is crossed) is that we will exhaustively pump up to 7.6k (to top of Ichi cloud).
Therefore for now, taking partial profits is fine for both scenarios.
Signals:
I think momentarily we have a sell signal.
Should we go down, the support is 6.8 - 6.9 range. This will coincide with the RSI bouncing off its MA. We will keep an eye on whether that price will act as a support closely (for possible re-entry).
First buy signal for further upwards movement is Ichi CL crossing thru BL.
Profits: Even though we had a window for ~21% profit, we (partially) have concluded this trade with ~11% profit.
We should continue with a new idea, because I still maintain my view on test of 5k.
Our main signal RSI thru MA in daily (top chart) indicating a buy signal which coincides with AO turning green. However we're yet to see Fisher(21) making a crossing.
In 4h chart we see Ichi CL crossing BL giving an uptrend signal. However Stoch RSI is maxed out.
We're bound to watch for 4h and 1h and look for loosening in Stoch oscillators.
Upwards movement is looking likelier than downwards however we don't have a sure signal. Entry is possible with tight stops. One more day before a clear signal.