BTC/USD - Upside Opportunities

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Traders I recommend reading this entire post so that you fully understand what I have done, and how I have came to my analysis.

BTC/USD looks like a long opportunity on the 4H chart.

After analyzing this pair, I discovered that price appears to be moving in patterns. Price seems to move up, have a corrective move, and then move up again, exceeding the previous top by around 400 points every time.

With this logic, I was able to predict and plot the next move on the chart. I have calculated each cycles move by measuring the amount of points it moved up before correcting. After I found there was an approximate 400 point move before each correction, I was then able to replicate a cycle at around 400 points to see the future direction of the instrument.

I am expecting an up move of 400 points which will complete at around 8780. Below I have illustrated the calculations as to how I came to this conclusion.

The principle of the cycles being used here is that every time there is an up move, there is a corrective move, and then an up-move which exceeds the previous move by approximately 400 points. With this information we can calculate (using cycles 1+2 data) where cycle 3 is likely to end up. Using the calculations below we can make a mathematical assumption as to where price will lead.

  • Cycle 1 = Cycle + 400 = 7980
  • Cycle 2 - Cycle 1 + 400 = 8380
  • Cycle 3 - Cycle 2 + 400 = 8780

Following these calculations, we can expect a reliable short term up-move, using previous trend cycles to predict a reliable, yet conservative move.

Do remember that price may correct before cycle 3 initiates. So it is important that you watch this trade carefully before considering a position.

I will be posting updates on this trade below, so leave it a like or follow so that you can keep up to date with this analysis.

Comment: After posting of this chart, price moved nicely as predicted towards the Cycle #3 target of 8780.

Now that price is nearing Cycle #3 completion, we need to review our analysis and see what to do next.

Upon reviewing this trade on a smaller time frame, I discovered that there is a sideways support forming.

Remember- that after each cycle has confirmed so far, there has been a correction first. So, if this sideways support is to be legitimate, we can expect to see price bounce off of this level before more upside.

Any breakdown below the support implies there is weakness in the trend, and could signal a reversal which would discontinue anymore cycles forming.

If price bounces on the sideways support and rallies, this will confirm that we are trading in the right direction, and opens the possibility to a Cycle #4 forming, which would give us a price target of 9180.

We would ideally like to see a relatively steep correction (To the sideways support line) before Cycle #4 forms. This is because if price bounces off this level, it confirms the uptrend integrity was tested, and proven to be still intact. A correction too shallow might give a false up move first creating a bull trap, before the big move actually takes place.

Comment: Cycle #3 has completed. Well done to all traders who profited from this analysis.

Now that price has completed Cycle #3, we can reanalyze the chart, and look for a potential cycle #4.

As soon as cycle #3 completed, there was a strong bearish move on the 2 hour chart, which was followed by strong upside. This resulted in the candle closing as a Doji candlestick. (See the candle in the black rectangle on the chart.)

After the downside correction, there was sharp buying activity. I was able to detect that the downside correction was just a pullback of the impulse leg.

The pullback landed on the 0.786 Fibonacci retracement support, before the strong buying began again. This confirmed it was just a pullback before the next impulse leg, and offered us a good buying opportunity, of which I monetized on. (See chart for more details)

When placing my trade, notice that my stop loss is just slightly below the newly formed sideways support line. This is because if price manages to break the sideways support line, then I know that there is no further cycles, and a change of trend is also occurring.

I am still expecting there will be a correction leg before Cycle #4 completes. But for the time being, I am monetizing on the short term impulse that occurred from the Doji candlestick. Price might go straight to Cycle #4 without another correction, which would be even better.

I will close this additional position trade when it begins to reverse in the 1 hour chart, and will then wait for another correction to get back into this pair again.

I will update this post further as it happens.

If you have any questions or queries, feel free to connect. :)

Comment: Cycle #4 has completed. We have made over $800 per Bitcoin in profit from this trade, in under 48 hours. A big well done to everybody who got this trade with me.

Now that Cycle #4 has completed, let's take a look at the chart again.

Once Cycle #3 completed, price had a downside correction, of which I bought a position on the 2HR chart (See update above for details of this trade). Since then, price rallied significantly, and completed our predicted cycle #4 without having a downside correction, resulting in a very profitable trade.

When Cycle #4 completed, price exceeded the Cycle #4 target. Price had a sharp downside correction on the 2 hr chart. resulting in a rejection type candle. (See chart for details)

Although the candle is not an official reversal candle, the candle had an upper shadow which moved more than halfway into the candlestick body. This to me immediately signifies the first signs of weakness. Upon seeing this candle, I exited the trade.

I will now watch BTC/USD closely for a buy opportunity in the near future. I will not be buying anymore positions in this pair until there is a proper pullback leg.

Comment: Price has moved up over 1600 points since I posted before. Crazy!

For anyone who took this move with me, well done. What a great move. Still rallying and no signs of weakness (yet).

Thanks very much Tom. Let us when when to buy again
Long time no see, i'am glad to see you back Tom. congratulation for the calls you made ;)
+1 Reply
@yen21, Thank you for your compliments. It is good to be back. Happy trading :)
Great calls! Now following you as a result. Recommended you to my trade group to follow. Very solid updates thank you!
+1 Reply
TomProTrader RoninBayersdorfer
@RoninBayersdorfer, Thank you, appreciate the recommendation!. I am glad you are finding my posts useful & informative.
It appears only a USD Tether trouble/ban can really dent BTC, otherwise its only going uphill. @TomProTrader I would also like your advice on whether Cyber Security utilizing blockchain tech is something worthy to look at in terms of early stage investment? The company behind this one is apparently already serving a lot of high profile enterprize clients. Have a look at advise:
+1 Reply
Levan screenager
But why do you think Tether will be banned?...
Who should ban it? When?...
+1 Reply
@Levan, counterfeit usd
Levan bossl1fe
yes, all we know that they are making USDT "out of thin air"...
but who should ban them?... there is no regulation for this...
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