Bitcoin Daily Update (day 179)

I believe that it is possible to beat the market through a consistent and unemotional approach. This is primarily achieved through preparing instead of reacting. Click here to get my complete trading strategy and click here to learn more about how I use the indicators below! Please be advised that I swing trade and will often hold onto a position for > 1 month. What you do with your $ is your business, what I do with my $ is my business.

FULL DISCLOSURE: I have been golfing, drinking and smoking all morning.

1 day - 1 week: short squeeze/test top of triangle at $7,000 -$7,400 | 1 week: Retest $6,000 | 1 month predictions: < $5,750 by 9/24 | bottom prediction: $3,000 by 10/30

Previous analysis/position: Closed my ETH:USD and ETH:BTC shorts due to btcusdshorts’ and lack of sell off following ETF denial / Smoking cigars on the sidelines
Patterns: Higher highers and higher lows on 4h, could form a trend
Horizontal support and resistance: R: $6,750 - $6,850 | S: $6,670
BTCUSDSHORTS: Pulling back from 40,000 and currently testing trend
Funding Rates: shorts pay long 0.0079%
12 & 26 EMA’s (calculate % difference): Price back on top of 12 & 26. Testing 26 for support | 12 = +3.06% | Bullish cross on 1h - 12h
50 & 128 MA’s: 50 = -3.02% | 128 = -9.51%
Volume: Still below MA, watch for spike if/when we break $6,800 resistance
FIB’s: 0.618 = $6,508 | 0.5 = $5,882
Candlestick analysis: Re exploring wick from Aug 22. Usually view this as good selling opportunity, not so sure this time.
Ichimoku Cloud: Saw a tweet (can’t remember who from) who ran a script that determined the Weekly Tenkan-Sen and Kijun-Sen are the most spread out (C-Clamp) in years. Strong indication of a bounce. Daily cloud at $7,150 should be resistance
TD’ Sequential: 9 on the 6hr
Visible Range: Gap in volume from $6,800 - $7,300 (3 month look back)
BTC’ Price Spreadsheet: 12h = +0.69% | 1d = +1.46% | 1w = +6.46% | 2w = +6.46% | 1m = -19.62%
Bollinger Bands: Daily is the most bearish indicator yet. Top of band + horizontal at $6,800 could be sneaky resistance and/or cause for a trap.
Trendline: Connect March 4th to July 24th. Next touch will be around $7,650.
Daily Trend: Bullish
Fractals: UP = $6,916 | DOWN = $6,226
On Balance Volume: Breaking through resistance on daily.
ADX: Bullish cross is meaningless unless ADX’ supports > 25 (would indicate further chop)
Chaikin Money Flow: Weekly still showing large bull div’ | Daily is pulling back for a slight bearish div’
RSI (30 setting): W = 49.29 | D = 48.40 | If both cross 50 it would confirm my expectation of a rally over the next week or two.
Stoch: Daily trending up nicely, with some room to go. Weekly has been trending down, now %K is angling up.

Summary: I started out by seeing a bullish short term setup with my top (most important) indicators, such as: btcusdshorts’ pulling back from resistance. Price > 12 & 26 day EMA’s combined with bullish cross on 1h -12h EMAs. The chart also looks like it is about ready to bust through a key level of resistance.

This is when an inexperienced trader can easily get fooled into buying resistance. This is a great example of why I like to go through all of the indicators that I have found important in the past.

That helped me to notice following resistance cluster before getting too excited: daily BB, horizontals with high volume node, daily Williams’ Fractal and the 9 on the 6hr TD sell setup. Instead of taking a small (1 / 5 normal position size) long I will be staying on the sidelines and prepare to sell the bounce.

Cheers!

Comment:

Chart below illustrates how lower time frames could make it look like we are at support, whereas zooming out shows bears attempting to turn prior support into resistance.