This is not an instrument that I actively trade but as a student of Technical Analysis and due to the hype prevailing on this instrument, It has become a point of interest to see if what I have learnt so far can be applied to any market (so far stellar results. Thank you Trade Empowered/Tier One mentors) and this instrument is proving to be a perfect testing ground.
This is a multi time-frame analysis so please bear with me.
So looking at
BTCUSD
on both the Weekly and Daily time-frames, this instrument has over the last few months (well since February 2018 really) been establishing a series of lower highs and retesting the zone that lies between the weekly lows (5870's) and Daily lows (6070's) setting up what is in essence a Descending Triangle formation.
Avoiding insulting your intelligence by trying to give my rendition in the form of a detailed explanation into the rationale and expectations of a Descending triangle, we drop down to the 4H time-frame, and looking at the most recent price action, we are visited with the very common and reliable Head and Shoulders price pattern.
Using one of the most common methods of determining targets for a head and shoulders pattern, it is interesting to see that price could potentially fall to the Daily lows as measured from head to neckline and then transposed in anticipation of a neckline break out.
IF this anticipated/predicted decline translates into a break of the Daily and potentially Weekly support levels as mentioned above, this instrument is predicted to see potentially significant declines from anywhere between 2970's and 170's price levels, using similar target measuring principles to that of the head and shoulders for the Descending Triangle (see included weekly chart). However that still remains to be seen as we could just bounce back higher on retest of support at the 6070's level.
So, first thing's first, lets see IF price can first break the neckline of our identified head and shoulders pattern, reach our measured head and shoulders target and then see how price reacts at the lows.
This is a multi time-frame analysis so please bear with me.
So looking at
BTCUSD
on both the Weekly and Daily time-frames, this instrument has over the last few months (well since February 2018 really) been establishing a series of lower highs and retesting the zone that lies between the weekly lows (5870's) and Daily lows (6070's) setting up what is in essence a Descending Triangle formation. Avoiding insulting your intelligence by trying to give my rendition in the form of a detailed explanation into the rationale and expectations of a Descending triangle, we drop down to the 4H time-frame, and looking at the most recent price action, we are visited with the very common and reliable Head and Shoulders price pattern.
Using one of the most common methods of determining targets for a head and shoulders pattern, it is interesting to see that price could potentially fall to the Daily lows as measured from head to neckline and then transposed in anticipation of a neckline break out.
IF this anticipated/predicted decline translates into a break of the Daily and potentially Weekly support levels as mentioned above, this instrument is predicted to see potentially significant declines from anywhere between 2970's and 170's price levels, using similar target measuring principles to that of the head and shoulders for the Descending Triangle (see included weekly chart). However that still remains to be seen as we could just bounce back higher on retest of support at the 6070's level.
So, first thing's first, lets see IF price can first break the neckline of our identified head and shoulders pattern, reach our measured head and shoulders target and then see how price reacts at the lows.
Comment:
Okay then... 4H H&S measured target achieved.
And with gusto to boot.
So the second part of my prediction has been met. Still, we can't count our chickens just yet.
Price has certainly violated the Daily and Weekly lows identified at 6070's and 5870's respectively BUT (again, the market does what it wants when it wants) until we see both a Daily close (about 7 hours or so to go depending on your time zone) and Weekly close (well you do the maths for that one) below these levels, price could just as easily get sucked back up above these levels.
That said, a Daily close below these levels would give more strength of conviction to the expected weekly close below these levels, which IF achieved, will allow us to refresh our analysis. That is to say, we reboot and start over on analysing HOW price is likely to achieve further downside targets IF price can maintain the violation of previous structure support and turn it into resistance (aka the neckline/base of our descending triangle formation).
So I once again tip my hat off to the mentors at Trade Empowered/Tier One Trading. I struggled to see these things and put the pieces together before coming across your tutelage, so my deepest gratitude for being the best mentors a guy could find EVER.
PS: If this is anything to go by (one outcome doesn't proof make and all that), your instruction works on any market on any time-frame.
So the second part of my prediction has been met. Still, we can't count our chickens just yet.
Price has certainly violated the Daily and Weekly lows identified at 6070's and 5870's respectively BUT (again, the market does what it wants when it wants) until we see both a Daily close (about 7 hours or so to go depending on your time zone) and Weekly close (well you do the maths for that one) below these levels, price could just as easily get sucked back up above these levels.
That said, a Daily close below these levels would give more strength of conviction to the expected weekly close below these levels, which IF achieved, will allow us to refresh our analysis. That is to say, we reboot and start over on analysing HOW price is likely to achieve further downside targets IF price can maintain the violation of previous structure support and turn it into resistance (aka the neckline/base of our descending triangle formation).
So I once again tip my hat off to the mentors at Trade Empowered/Tier One Trading. I struggled to see these things and put the pieces together before coming across your tutelage, so my deepest gratitude for being the best mentors a guy could find EVER.
PS: If this is anything to go by (one outcome doesn't proof make and all that), your instruction works on any market on any time-frame.
Comment:
Ok so awesome trade analysis so far. Couldn't have predicted that price would move as drastically as it did but that's trading for you. You run your analysis, develop your expectations, execute your ideas and let the market do the rest. Can't help but say I feel good for this one. Markets have performed inline with expectations and more besides.
In any case, parts one, two and potentially three of our prediction have played out quite nicely. Congrats to anyone able to skim a profit off this trade (obviously after you did your own analysis in line with your own trading plan and rules otherwise- BAD TRADE, BAD DISCIPLINE).
We got our daily close below the identified support levels at 6070's (Daily) and 5870's (Weekly), so the likelihood of seeing further downside has been provisionally established. I'd still need to see price maintain a close below these levels on a weekly basis for confirmation that we are more likely to see further downside as anticipated, but this is a good sign for bearish expectations (and even the bulls, because price has become cheaper-it's all a matter of perspective).
We are now holding at a minor level of Daily structure at the 5550's psychological level
but I'm not too convinced by this level as it does not track too well looking at it from a weekly perspective
(kinda a floater on the Weekly charts at the mo')
So, that said, I'd anticipate, based on the strength of the move, violation of structure support and perceived strength of the current support level, that we could see further downside to where I consider to be areas of major support between the 4600's and 3660/20's levels where we could then find some bullish interest to give some upside relief to this downside exuberance.
I'd like to see IF price consolidates at current levels - because while I may not think too highly of this level, psychological and even handled levels are significant- allowing the market to catch it's breath and gain some perspective, to support my expectation of further downside.
So, again, we maintain caution until we get that weekly close below the 6070's and 5870's levels, for confirmation that the downside most certainly prevails.
So an upgrade to the subject of this analysis: THE BTC/USD SQUEEZE IS ALMOST CERTAINLY OVER!!
In any case, parts one, two and potentially three of our prediction have played out quite nicely. Congrats to anyone able to skim a profit off this trade (obviously after you did your own analysis in line with your own trading plan and rules otherwise- BAD TRADE, BAD DISCIPLINE).
We got our daily close below the identified support levels at 6070's (Daily) and 5870's (Weekly), so the likelihood of seeing further downside has been provisionally established. I'd still need to see price maintain a close below these levels on a weekly basis for confirmation that we are more likely to see further downside as anticipated, but this is a good sign for bearish expectations (and even the bulls, because price has become cheaper-it's all a matter of perspective).
We are now holding at a minor level of Daily structure at the 5550's psychological level
So, that said, I'd anticipate, based on the strength of the move, violation of structure support and perceived strength of the current support level, that we could see further downside to where I consider to be areas of major support between the 4600's and 3660/20's levels where we could then find some bullish interest to give some upside relief to this downside exuberance.
I'd like to see IF price consolidates at current levels - because while I may not think too highly of this level, psychological and even handled levels are significant- allowing the market to catch it's breath and gain some perspective, to support my expectation of further downside.
So, again, we maintain caution until we get that weekly close below the 6070's and 5870's levels, for confirmation that the downside most certainly prevails.
So an upgrade to the subject of this analysis: THE BTC/USD SQUEEZE IS ALMOST CERTAINLY OVER!!
Comment:
Happy new week traders. I trust everyone had as stellar a weekend as I did as I turned a year older and was monumentally celebrated. A big thank you to my family and friends.
On the Technical Analysis/trading front, this will be my last update for the analysis on this instrument/market.
So, we got our Weekly Lower low, lower close below the previous structure support levels identified 6070's (Daily) and 5870's weekly now turned resistance. So it is official. THE SQUEEZE IS DEFINITELY OVER AND THE DOWNSIDE PREVAILS. That is to say from here on out if I were trading this instrument, I would have a primarily short bias and be looking to sell the rallies. So we are looking at a greater likely hood of price falling to the 3000 level many have been talking about.
Not only that, we got our consolidation at the 5550's level (quite beautifully I might add. That psychological level showed me...price held for two days above this level on the Daily's) and price action has established a nice range between 5600's and 52/5100 levels (more visible on the lower time-frames so I look at it as provisional on the Higher time-frames, i.e. not 100% established)
So I maintain my expectation of further downside to significant support between the 4600 and 3660's levels, where I would anticipate a resurgence of some bullish interest, but only as a temporary relief before resumption of the downside.
That said, we could continue to hold this preemptively identified range in which case while I maintain my bearish bias, I would apply caution as price could potentially decide on an early relief.
An upside breakout of this possible range from a Daily perspective could potentially bring us back to the 6070's/6200's level for a retest of the Descending Triangle neckline which would then be where I would be looking for shorts. The downside breakout of the range would as mentioned bring us to between the 4600 and 3660's levels where I could look for entry reasons for a counter trend long trade back to the 5550's as initial targets and then potentially the 5870's, 6070,s and 6200 levels and again prepare to go the other way and short this instrument where the opportunity presents itself.
But from here on in I'm taking a step back and pulling the good old wait and see, restarting the I.P.D.E process (Identify, Predict, Decide and Execute-which I guess I have sort of prematurely done here).
So In closing, thank you all for taking the time to read through and hopefully review my analysis over the past week. Comments and critiques would have been most welcomed (You only know what you know, and can only act on that, which can inadvertently limit ones growth. So you can never learn enough from both the good and the bad and I certainly want to keep growing in this arena/field of trading). I have really enjoyed doing this and I'm grateful for the journey thus far.
To my mentors at Trade Empowered/Tier One Trading I again say a big thank you. I still have a long way to go but I'm grateful for how far I've come and I truly believe that I have only come this far because of your tutelage, support and encouragement.
PROCESS OVER OUTCOME. BELIEF, ACTIONS, RESULTS. DISCIPLINE AND CONSISTENCY - THESE ARE SURE FIRE PRINCIPLES THAT UNDERPIN SUCCESS IN ANY FIELD AND ENDEAVOUR. I LOOK FORWARD TO ACHIEVING IT!
On the Technical Analysis/trading front, this will be my last update for the analysis on this instrument/market.
So, we got our Weekly Lower low, lower close below the previous structure support levels identified 6070's (Daily) and 5870's weekly now turned resistance. So it is official. THE SQUEEZE IS DEFINITELY OVER AND THE DOWNSIDE PREVAILS. That is to say from here on out if I were trading this instrument, I would have a primarily short bias and be looking to sell the rallies. So we are looking at a greater likely hood of price falling to the 3000 level many have been talking about.
Not only that, we got our consolidation at the 5550's level (quite beautifully I might add. That psychological level showed me...price held for two days above this level on the Daily's) and price action has established a nice range between 5600's and 52/5100 levels (more visible on the lower time-frames so I look at it as provisional on the Higher time-frames, i.e. not 100% established)
That said, we could continue to hold this preemptively identified range in which case while I maintain my bearish bias, I would apply caution as price could potentially decide on an early relief.
But from here on in I'm taking a step back and pulling the good old wait and see, restarting the I.P.D.E process (Identify, Predict, Decide and Execute-which I guess I have sort of prematurely done here).
So In closing, thank you all for taking the time to read through and hopefully review my analysis over the past week. Comments and critiques would have been most welcomed (You only know what you know, and can only act on that, which can inadvertently limit ones growth. So you can never learn enough from both the good and the bad and I certainly want to keep growing in this arena/field of trading). I have really enjoyed doing this and I'm grateful for the journey thus far.
To my mentors at Trade Empowered/Tier One Trading I again say a big thank you. I still have a long way to go but I'm grateful for how far I've come and I truly believe that I have only come this far because of your tutelage, support and encouragement.
PROCESS OVER OUTCOME. BELIEF, ACTIONS, RESULTS. DISCIPLINE AND CONSISTENCY - THESE ARE SURE FIRE PRINCIPLES THAT UNDERPIN SUCCESS IN ANY FIELD AND ENDEAVOUR. I LOOK FORWARD TO ACHIEVING IT!
The BTCUSD bulls are certainly putting in a decent fight for the survival and success of this instruments' hype values. That said, the bears are giving it the good old one-two as well and are making it quite clear they are in this fight in case of any doubt.
If nothing else, this tug of war between the bulls and bears has certainly established the 6310's level as a significant resistance point (at least from a 4H/1H perspective) going forward, which to a Technical Analyst/Trader/ Speculator or even Investor is almost as good as Gold (in proverbial not commodity terms... see what I did there!!..) so make a note of this level.
There we have it then, part one of my prediction is complete/playing out albeit without as much accent as we would prefer, but the battle ground is set.
So let's see if we can realise part two of this prediction and achieve measured targets, cause as we all know, the market does what it wants (even a hype driven one - and to be fair, many older markets have over the years seen their fair share of hype driven price action, albeit with less grandiose accelerations - but I guess that would be relative).
Happy and successful trading y'all. From One Good Trade to the next.