TradingShot

BITCOIN Trust the 4H MA50/MA200 pattern

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
First of all congratulations hodlers. Another benchmark, the very important $30000, has been breached! There is every reason to be excited yet again, but rest assured, there are also several signs and patterns to consider for this 1st month of 2021.

Today Bitcoin made yet another high, almost hitting $35k, but since we see a correction. Everyone must be wondering how low it can go this time. Well the 4H MA50 and MA200, as well as the LMACD and RSI (on the 4H time-frame), may give a few interesting pointers.

** The MA50/ MA200 on 4H **
As you see on the chart, BTC has been supported by the MA50 (blue trend-line) on the 4H time-frame since December 12. During that period, the price made contact with that line only once (December 23). Prior to the 4H MA50, BTC had the 4H MA200 (orange trend-line) as Support from November 26 to December 12 (made contact twice). As seen on the chart, I've distinguished the 4H MA50 and MA200 holding phases, and I will explain right away why.

** The RSI and LMACD **
The start and end on the two MA50 holding phases, are exactly when the RSI hits its Resistance Zone (red flags). On top of that, the LMACD sequences of those two phases are identical (see (a), (b), (c)). On the other hand the MA200 holding phase, is below the RSI Resistance Zone , with no registered contact, while also being below the RSI Support Zone (MA50 Support Zone ), noted in green.

** Conclusion **
But what does the above tell us? Assuming the post MA50 holding sequence (November/ December) is replicated, then BTCUSD may have made a top or make one near the -0.236 Fib extension and if the 4H MA50 breaks, find Support on the 4H MA200 (around the 0.5 Fib retracement level), for a roughly 3 week consolidation.

Do you think these sequence can provide a framework to trade for the next month? Are you waiting for a 0.5 Fibonacci correction or are you buying on a daily basis? Feel free to share your work and let me know in the comments section!


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Comments

excellent summary for bitcoin traders!
200coins
+4 Reply
I'm at every dip...lol
+14 Reply
jlspartz ilesanmipepsi
@ilesanmipepsi, I don't understand how people say they always buy at every dip. Then when do you sell? And why weren't you all in on the rally?
+5 Reply
TradingShot jlspartz
@jlspartz, Maybe he doesn't sell yet. Maybe he is adding on every retrace. Which so far has proven to be the most effective strategy for non short term traders.
+5 Reply
HeyJonBray TradingShot
@TradingShot, Exactly what I do. I might not catch the dip perfectly, but once I know it's not a reversal, I buy. I have yet to ever sell BTC. I only care about increasing my holdings and could not care less what the price is as there's a good chance in my lifetime that measuring BTC in terms of US Dollars will be irrelevant.
Reply
@jlspartz, It's in two ways: 1. When people buy at every dip, they will eventually average in their purchases. And it's not possible to buy BTC at once because they're holding it. 2. As a leverage trader, I have the opportunity to buy at every dip since each of the purchases is counted as individual positions on the exchange where I trade. I usually use this strategy whenever BTC falls below my first position without having reached my set target. So, at the end all orders will be closed at my initial target. I hope this helps.
+4 Reply
TradingShot ilesanmipepsi
@ilesanmipepsi, That has been the winning strategy on every Bull Cycle. There is still at least one good year left to it. Well done.
Reply
ilesanmipepsi TradingShot
@TradingShot, thanks for your remark.
Reply
Fiyi77 ilesanmipepsi
@ilesanmipepsi, what strategy do you use when planning your target? A percentage increase or a fib level...etc. I never know where to put my sell target.
Reply
@Fiyi77, I use pivotal levels.
Reply
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