The Most Important Horizontal Zones During the Consolidation
It has been very difficult to chart the price of Bitcoin recently as we could not rely on any recent price action to draw horizontal support and resistance zones.
There a few options when we encounter problems like those. First of all we can use older horizontal zones and extend them on the chart, giving an indication of what might happen to the price based on what we've seen months, or sometimes even years ago.
It goes without saying obviously that zones that are years old might not hold the relevance that we are looking for in our technical analysis. I am happy that now we are trading in an area where we move between recent lows and highs, an area much more comfortable for nice scalp trade set-ups on bitcoin.
In this analysis I show you the most important horizontal zones and explain why I am looking at those, then finally I will also explain how to trade BTC right now given those horizontal zones.
Most of them are clearly explained on the chart and should be clear from looking at the horizontal levels. However, there is one area in particular of the chart that I want to highlight: the moon zone.
I call this in this way because there is no price action to chart this properly, it is very difficult to understand what will happen if the price moves beyond this level.
Of course we can leverage technical indicators, but as you know from my charts I try to keep things as simple as possible and won't use it very often.
A strategy I suggest using if the price does break through the all time high and moves into the moonzone is to place a trailing stop loss. Essentially every time the price moves up you increase your stop loss level too. Meaning you have unlimited upside potential while limiting your potential downside loss.
You have a few options now to trade. First of all you can decide to wait for the price to get a bit closer to the nearest horizontal zone of resistance around the ~$18250 level and enter a short position to ~$16500 again. This gives you a great 10% trade opportunity.
The second option is to go long, but honestly if you weren't in already you are a bit too late now. It is not smart to enter a long in the middle between support and resistance. The risk reward is simply not worth it. I suggest that if you want to enter a long, you wait for the price to retrace to a lower level such as $16,500 or wait for confirmation of the uptrend for instance by waiting for a breakout on the $18250 horizontal level.
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- Trading Guru
--------------------------------------------------------------
Disclaimer!
This post does not provide financial advice. It is for educational purposes only!
There a few options when we encounter problems like those. First of all we can use older horizontal zones and extend them on the chart, giving an indication of what might happen to the price based on what we've seen months, or sometimes even years ago.
It goes without saying obviously that zones that are years old might not hold the relevance that we are looking for in our technical analysis. I am happy that now we are trading in an area where we move between recent lows and highs, an area much more comfortable for nice scalp trade set-ups on bitcoin.
In this analysis I show you the most important horizontal zones and explain why I am looking at those, then finally I will also explain how to trade BTC right now given those horizontal zones.
Most of them are clearly explained on the chart and should be clear from looking at the horizontal levels. However, there is one area in particular of the chart that I want to highlight: the moon zone.
I call this in this way because there is no price action to chart this properly, it is very difficult to understand what will happen if the price moves beyond this level.
Of course we can leverage technical indicators, but as you know from my charts I try to keep things as simple as possible and won't use it very often.
A strategy I suggest using if the price does break through the all time high and moves into the moonzone is to place a trailing stop loss. Essentially every time the price moves up you increase your stop loss level too. Meaning you have unlimited upside potential while limiting your potential downside loss.
You have a few options now to trade. First of all you can decide to wait for the price to get a bit closer to the nearest horizontal zone of resistance around the ~$18250 level and enter a short position to ~$16500 again. This gives you a great 10% trade opportunity.
The second option is to go long, but honestly if you weren't in already you are a bit too late now. It is not smart to enter a long in the middle between support and resistance. The risk reward is simply not worth it. I suggest that if you want to enter a long, you wait for the price to retrace to a lower level such as $16,500 or wait for confirmation of the uptrend for instance by waiting for a breakout on the $18250 horizontal level.
Follow me for consistent high quality updates, with clear explanations and charts.
Please like this post to support me.
- Trading Guru
--------------------------------------------------------------
Disclaimer!
This post does not provide financial advice. It is for educational purposes only!
Comment:
Turns out the price has been going straight up! We see a really big green candle on the 1h, going straight towards the resistance. We're at a pivotal moment right now. This could already be a good moment to enter a short, or wait for a retracement to enter a long. But I'd say risk-reward wise it's not a good moment to enter a long after the price has already been going up for a bit.
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(bắt đầu từ tháng 2 - 2023)
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(bắt đầu từ tháng 2 - 2023)