BTC/USD - Analysis of recent events and a Double Top
Quick BTC/USD analysis of the last few Months:
Looking at the Price and the Relative Strength Index (RSI) Convergence/Divergence:
From Tuesday 13th Sept 22 until Saturday 5th Nov 2022 we had Convergence with the Price and RSI which indicated a reversal was most likely on its way.
Price = HH - LH (Higher High - Lower High)
RSI = HH - HH (Higher High - Higher High)
Next from Wednesday 9th Nov 2022 to Monday 21st Nov 2022 we had Convergence with the Price and the RSI which then lead to a reversal breakout.
Price = LL - LL (Lower Low - Lower Low)
RSI = LL - HL (Lower Low - Higher Low)
Next from Sunday 29th Jan until Tuesday 21st Feb 2023 we had Divergence with the Price and the RSI leading to the bearish reversal drop that we are still in today. I suppose you could start this Divergence sooner if you wanted, but i have started it on the 21st Feb 2023.
Price = HH - HH (Higher High - Higher High)
RSI = HH - LH (Higher High - Lower High)
Here is a closer look at the 1 day chart.
Here is a closer look at the RSI Indicator.
For those who are new and do not know, please note that Divergence/Convergence with the Price and RSI is indicted by the Straight Yellow Lines on the Chart and RSI Indicator.
A few other bits.
BTC has also created a Double Top Pattern as indicated by the 2 circles on the chart with arrows. The 1st Top was at Monday 15th Aug 2022 and 2nd Top was at Tuesday 16th Feb 2023. Note that BTC tried to get above this support level 3x and failed all attempts at closing above this resistance line.
BTC is still in an Ascending Channel Pattern, while it did break out of its Upper Resistance Trend-line, it did not CLOSE ABOVE it, so this Upper Resistance Trend-line is still valid.
Using the Lower Trend-line of the Ascending Channel and the Double Top Resistance line, we can also say that BTC may also be in an Ascending Triangle Pattern.
At the moment of typing this, BTC is still below its 50MA (Yellow Line) and has found some support from its 200MA (Red Line).
Looking at just the Leading Span A (Senkou Span A) and Leading Span B (Senkou Span B) of the Ichimoku Cloud, we can see that BTC is in the Equilibrium Zone Inside the Cloud. Note that a successful daily candle CLOSE BELOW the 200MA will also bring BTC under its Leading Span B (Senkou Span B) support level into the Bearish Zone of the Ichimoku Cloud. Please note that i am not using the traditional 9,26,52,26 settings for this cloud.
Looking at the Bollinger Bands, we can see that we have had massive expansion of the Upper and Lower Bands for the negative side, BTC is still way below its Middle Band Basis 20 Period SMA and note that the Middle Band is still Pointing Downwards. Note that BTC is still walking on the underside of its Lower Band.
My thoughts:
While Silvergate Bank’s liquidation may have contributed to the drop we are still in, looking at this chart, we can clearly see that the Price and the RSI were already giving the warning signs back in February especially with the Double Top and Price/RSI Divergence. We will now have to see if the 200MA holds as Support, if it doesn’t then next is the Lower Trend-line of the Ascending Channel Pattern.
During these recession, it is iInteresting times ahead for BTC and the whole Crypto market. In any case, i hope this post has been informative and has helped those who are new to charting and using Price/Oscillator Convergence & Divergence to help predict possible price movement.
Looking at the Price and the Relative Strength Index (RSI) Convergence/Divergence:
From Tuesday 13th Sept 22 until Saturday 5th Nov 2022 we had Convergence with the Price and RSI which indicated a reversal was most likely on its way.
Price = HH - LH (Higher High - Lower High)
RSI = HH - HH (Higher High - Higher High)
Next from Wednesday 9th Nov 2022 to Monday 21st Nov 2022 we had Convergence with the Price and the RSI which then lead to a reversal breakout.
Price = LL - LL (Lower Low - Lower Low)
RSI = LL - HL (Lower Low - Higher Low)
Next from Sunday 29th Jan until Tuesday 21st Feb 2023 we had Divergence with the Price and the RSI leading to the bearish reversal drop that we are still in today. I suppose you could start this Divergence sooner if you wanted, but i have started it on the 21st Feb 2023.
Price = HH - HH (Higher High - Higher High)
RSI = HH - LH (Higher High - Lower High)
Here is a closer look at the 1 day chart.
Here is a closer look at the RSI Indicator.
For those who are new and do not know, please note that Divergence/Convergence with the Price and RSI is indicted by the Straight Yellow Lines on the Chart and RSI Indicator.
A few other bits.
BTC has also created a Double Top Pattern as indicated by the 2 circles on the chart with arrows. The 1st Top was at Monday 15th Aug 2022 and 2nd Top was at Tuesday 16th Feb 2023. Note that BTC tried to get above this support level 3x and failed all attempts at closing above this resistance line.
BTC is still in an Ascending Channel Pattern, while it did break out of its Upper Resistance Trend-line, it did not CLOSE ABOVE it, so this Upper Resistance Trend-line is still valid.
Using the Lower Trend-line of the Ascending Channel and the Double Top Resistance line, we can also say that BTC may also be in an Ascending Triangle Pattern.
At the moment of typing this, BTC is still below its 50MA (Yellow Line) and has found some support from its 200MA (Red Line).
Looking at just the Leading Span A (Senkou Span A) and Leading Span B (Senkou Span B) of the Ichimoku Cloud, we can see that BTC is in the Equilibrium Zone Inside the Cloud. Note that a successful daily candle CLOSE BELOW the 200MA will also bring BTC under its Leading Span B (Senkou Span B) support level into the Bearish Zone of the Ichimoku Cloud. Please note that i am not using the traditional 9,26,52,26 settings for this cloud.
Looking at the Bollinger Bands, we can see that we have had massive expansion of the Upper and Lower Bands for the negative side, BTC is still way below its Middle Band Basis 20 Period SMA and note that the Middle Band is still Pointing Downwards. Note that BTC is still walking on the underside of its Lower Band.
My thoughts:
While Silvergate Bank’s liquidation may have contributed to the drop we are still in, looking at this chart, we can clearly see that the Price and the RSI were already giving the warning signs back in February especially with the Double Top and Price/RSI Divergence. We will now have to see if the 200MA holds as Support, if it doesn’t then next is the Lower Trend-line of the Ascending Channel Pattern.
During these recession, it is iInteresting times ahead for BTC and the whole Crypto market. In any case, i hope this post has been informative and has helped those who are new to charting and using Price/Oscillator Convergence & Divergence to help predict possible price movement.
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