All we need in this period of a market is being patient.
"This period" means that we are in a ranging market. The price chart formed a Trading range and price is not making any significant moves, except playing on local levels. In other words it is not a good environment for initiating trades. So the breakout from this range would be something we can work with.
In this analysis I noticed one interesting thing How we can use a combination of RSI and MACD for initiating a good short position. Before we start, I recommend you to read my two previous ideas, where I was telling about Mid Term downtrend. To be short, crossover between 20 and 121 MA signaled, this Mid Term downtrend had come, plus there was a confirmation from RSI. It is important to know the trend, because it influences on how we can use the tools.
One more addition: The reasons why I changed standard parameters on RSI and MACD, you can find in my previous ideas
Back to the analysis:
Start with MACD indicator - you can see on the Chart that MACD line directing to the crossover, as I wrote in previous idea crossover between MACD line and Signal line means the 20 MA changes its direction or its behavior (for example: when Market changes its type from Ranging to Trading and vice versa). In case the crossover happens we won't be able to say if 20 MA changes its behavior or its direction on Upward.
RSI might help us with this confusion. Currently the RSI indicator is going stable in area between 50 and 25 levels, how it should be during a downtrend. So in case the 20 MA changes its direction on Upward, there is a big chance that RSI will visit an overbought zone. If you have read my previous idea you know that during a downtrend overbought zone is not above 70 extreme board (in standard) or 75 extreme board (which I use). We can use an area between 75 and 50 levels as an overbought zone. (On a Daily Chart)
Despite this interesting combination of using these tools, I would not recommend to initiate a long position. RSI and MACD are trend-following momentum indicators and it is better when their signals conform to the trend (our case: downtrend). But using this information we can better play on current trend, in case Upward movement happens we can find good entry points to initiate sell positions (as it said: sell high). I marked three interesting levels on the Chart two of them have been historically important:
1. $9.200-9.500 Possible resistance zone (historically important, because served as a strong support)
2. $10.163 (121 MA level (can be changed with time) historically important, because served as strong resistance during a downtrend)
3. Ichi Cloud (it is a dynamic and depended on time when price potentially might grow will be on deferent levels)
Ichi cloud served as a resistance for the price, but in period when there was no volatility, this is why this level can be not so strong as first two.
Ichi cloud has one more function on this chart, it shows how strong the downtrend is.
And talking about downtrend, there is more interesting info to think about:
Long positions are prevailing on short positions, and this is not only happening with BTC. The situation is about the same with top 5 coins after BTC (ETH, XRP, BCH, LTC, EOS)
The situation with Bitcoin dominance:
BTC dominance has formed an Upward channel which means the Main trend still remains Uptrend (for dominance). But the price rejected from ascending resistance trendline and changed its local trend for a Downtrend. Currently it seems that price is moving to its support trendline for testing it (which means the dominance of BTC is falling and alts might increase their value in BTC pair)
Based on all this information: I think downtrend for BTC is something necessary, because we had an Intensive growth and commonly after such growths follow big corrections, plus market sentiment is too positive.
74% longs vs 26% shorts (by Bifinex)
60% longs vs 40% shorts (by BitMEX)
For alts: dependent on how BTC downtrend will go (I mean what type of market will be prevailing Ranging or Trending, and what will be with volatility of BTC). If dominance of BTC will continue falling and the Price Chart will prefer Ranging type as prevailing, it can be good environment for alts to increase their volumes relatively to BTC pair)
I must notice that my conclusion can be very subjective, because information is very opened to interpretation, everyone can understand the same data in different ways. At this point it would be very important for me to know what you think, and how you interpret this information, and probably you have something more important for consideration.
Main points:
1. There might be an Upward move
2. Main zones are given, where it is better to initiate sell positions
3. Mid Term downtrend defined (according to some of my previous analyzes)
Screenshots in addition:
20 and 121 MA interaction
BTC dominance
To Thank You for reading this idea I will give you one useful thought to think - "being without a position, is still being in position"
Please If you like the idea hit the like button and follow this channel in order not to miss new ideas. Share your ideas and thoughts as well in the comments.
Remember this analysis is not 100% accurate. No single analysis is. To make a decision follow your own thoughts.
The information given is not a Financial Advise.
"This period" means that we are in a ranging market. The price chart formed a Trading range and price is not making any significant moves, except playing on local levels. In other words it is not a good environment for initiating trades. So the breakout from this range would be something we can work with.
In this analysis I noticed one interesting thing How we can use a combination of RSI and MACD for initiating a good short position. Before we start, I recommend you to read my two previous ideas, where I was telling about Mid Term downtrend. To be short, crossover between 20 and 121 MA signaled, this Mid Term downtrend had come, plus there was a confirmation from RSI. It is important to know the trend, because it influences on how we can use the tools.
One more addition: The reasons why I changed standard parameters on RSI and MACD, you can find in my previous ideas
Back to the analysis:
Start with MACD indicator - you can see on the Chart that MACD line directing to the crossover, as I wrote in previous idea crossover between MACD line and Signal line means the 20 MA changes its direction or its behavior (for example: when Market changes its type from Ranging to Trading and vice versa). In case the crossover happens we won't be able to say if 20 MA changes its behavior or its direction on Upward.
RSI might help us with this confusion. Currently the RSI indicator is going stable in area between 50 and 25 levels, how it should be during a downtrend. So in case the 20 MA changes its direction on Upward, there is a big chance that RSI will visit an overbought zone. If you have read my previous idea you know that during a downtrend overbought zone is not above 70 extreme board (in standard) or 75 extreme board (which I use). We can use an area between 75 and 50 levels as an overbought zone. (On a Daily Chart)
Despite this interesting combination of using these tools, I would not recommend to initiate a long position. RSI and MACD are trend-following momentum indicators and it is better when their signals conform to the trend (our case: downtrend). But using this information we can better play on current trend, in case Upward movement happens we can find good entry points to initiate sell positions (as it said: sell high). I marked three interesting levels on the Chart two of them have been historically important:
1. $9.200-9.500 Possible resistance zone (historically important, because served as a strong support)
2. $10.163 (121 MA level (can be changed with time) historically important, because served as strong resistance during a downtrend)
3. Ichi Cloud (it is a dynamic and depended on time when price potentially might grow will be on deferent levels)
Ichi cloud served as a resistance for the price, but in period when there was no volatility, this is why this level can be not so strong as first two.
Ichi cloud has one more function on this chart, it shows how strong the downtrend is.
And talking about downtrend, there is more interesting info to think about:
Long positions are prevailing on short positions, and this is not only happening with BTC. The situation is about the same with top 5 coins after BTC (ETH, XRP, BCH, LTC, EOS)
The situation with Bitcoin dominance:
BTC dominance has formed an Upward channel which means the Main trend still remains Uptrend (for dominance). But the price rejected from ascending resistance trendline and changed its local trend for a Downtrend. Currently it seems that price is moving to its support trendline for testing it (which means the dominance of BTC is falling and alts might increase their value in BTC pair)
Based on all this information: I think downtrend for BTC is something necessary, because we had an Intensive growth and commonly after such growths follow big corrections, plus market sentiment is too positive.
74% longs vs 26% shorts (by Bifinex)
60% longs vs 40% shorts (by BitMEX)
For alts: dependent on how BTC downtrend will go (I mean what type of market will be prevailing Ranging or Trending, and what will be with volatility of BTC). If dominance of BTC will continue falling and the Price Chart will prefer Ranging type as prevailing, it can be good environment for alts to increase their volumes relatively to BTC pair)
I must notice that my conclusion can be very subjective, because information is very opened to interpretation, everyone can understand the same data in different ways. At this point it would be very important for me to know what you think, and how you interpret this information, and probably you have something more important for consideration.
Main points:
1. There might be an Upward move
2. Main zones are given, where it is better to initiate sell positions
3. Mid Term downtrend defined (according to some of my previous analyzes)
Screenshots in addition:
20 and 121 MA interaction
BTC dominance
To Thank You for reading this idea I will give you one useful thought to think - "being without a position, is still being in position"
Please If you like the idea hit the like button and follow this channel in order not to miss new ideas. Share your ideas and thoughts as well in the comments.
Remember this analysis is not 100% accurate. No single analysis is. To make a decision follow your own thoughts.
The information given is not a Financial Advise.
