Bitcoin Shows Follow Through on Yesterday's Morning Star! (BTC)
Hi friends! Welcome to this update analysis on Bitcoin! Let's get right to it! Looking at the daily BTC chart, we can see that the pattern from yesterdays analysis didn't form a textbook morning star. As you can see, yesterday's candle was an inverted hammer with a small body. If the candle had a larger body, it would have been a textbook morning star formation, but regardless, we are seeing a continuation higher today. So, this is an important lesson that indicators don't have to be perfect. During my time publishing analyses, I have seen a lot off people express opposition to some of my charts, that show patterns that aren't technically perfect. I remember calling a head and shoulders at the top of ADA, and a lot of people disagreed, because they think that formations and patterns have to be perfect. That simply isn't true, and the more you delve into technical analysis, the more you will understand that. However, there is a fine balance. If a pattern is too abnormally skewed, it probably isn't what you think it is. So, you have to allow some wiggle room for formations, because they wont always be perfect.
Looking at today's chart, we can see that there is a nice big green continuation candle, right on the back of the morning star, or "quasi morning star." So, the morning star is working perfectly thus far. Additionally, we can see that BTC is above the 10 EMA (in blue) which I have been talking a lot about. BTC hasn't closed a daily candle above the 10 EMA since November 13th. So, if we close today above it, on the back of a morning star, that would definitely be a change in recent market behavior.
BTC is in a small downtrend channel right now (in black.) So, once price gets up to the top of the downtrend channel, it will run into resistance there. If BTC breaks out above the downtrend channel, I believe that we will see a rally to the 50 EMA (in orange) which would put BTC somewhere in the low $4000s.
Momentum on the MACD is expanding higher, after it held the uptrend of a bullish divergence (green trendline) which is the second bullish divergence in a series of bullish divergences that has been building on the BTC daily chart for months. These bullish divergences in series show that the sell-side momentum of the bear market has been consistently declining in the background, which suggests that we may be approaching an important bottom in the bear market. However, the bulls still have a lot of ground to make up. For now, price remains in a downtrend channel. Be on the lookout for a close above the 10 EMA (in blue) on today's daily candle. From there, we will be watching to see if BTC can breakout above the downtrend channel, of if it will force BTC back to the downside.
Happy Holidays Everyone, and good luck trading!
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-
Looking at today's chart, we can see that there is a nice big green continuation candle, right on the back of the morning star, or "quasi morning star." So, the morning star is working perfectly thus far. Additionally, we can see that BTC is above the 10 EMA (in blue) which I have been talking a lot about. BTC hasn't closed a daily candle above the 10 EMA since November 13th. So, if we close today above it, on the back of a morning star, that would definitely be a change in recent market behavior.
BTC is in a small downtrend channel right now (in black.) So, once price gets up to the top of the downtrend channel, it will run into resistance there. If BTC breaks out above the downtrend channel, I believe that we will see a rally to the 50 EMA (in orange) which would put BTC somewhere in the low $4000s.
Momentum on the MACD is expanding higher, after it held the uptrend of a bullish divergence (green trendline) which is the second bullish divergence in a series of bullish divergences that has been building on the BTC daily chart for months. These bullish divergences in series show that the sell-side momentum of the bear market has been consistently declining in the background, which suggests that we may be approaching an important bottom in the bear market. However, the bulls still have a lot of ground to make up. For now, price remains in a downtrend channel. Be on the lookout for a close above the 10 EMA (in blue) on today's daily candle. From there, we will be watching to see if BTC can breakout above the downtrend channel, of if it will force BTC back to the downside.
Happy Holidays Everyone, and good luck trading!
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-
Comment:
Update: BTC has now run into the top of the downtrend channel. A break above it would be very bullish for short-term price movement, and it would put a test of the 50 EMA in play.
