FTMUSD telegraphed current market conditions with a convergence of signals.
The black line indicates the day we could safely make a decision with proper risk management, by making sure we wait for patterns and signals to completely mature before making a decisive move.
1. On 17 January 22 FTM was trading above $3.00. That day it reached a local all-time-high, meaning on this particular time frame of a few weeks. The resistance trendline formed by price action (1) shows an uptrend.
However, all of my other indicators signaled an imminent failure.
2. Volume was in decline (2). Old school traders used to say wait for volume confirmation, though I see that less and less now. However, in this context, volume is confirming a weakening of purchasing. You can then see, right of the blackline, an increase in selling to present.
3. The relative strength indicator (RSI) showed two signals. A bearish divergence illustrated in the trendline, which is also a failure swing. RSI has been extremely useful in FTM and SPELL recently and I've watched it very closely.
4. The awesome oscillator (AO) showed a bearish "twin-peaks", which diverged from the price action as well. This demonstrated again a weakening in total momentum.
Using all these indicators to back a theory has become a cornerstone of my charting. Price action alone may not have telegraphed this movement, and if you combine that with good money management principles you could trade this. As an investor (long term holder with staking and farming yields) this tells me when to save cash for discount prices. In addition, in tells me not to rely on yields from liquidity pools that are pegged to this asset. Perhaps, if you were so inclined, this would have been the time to rotate liquidity pools to stablecoin farms, or other strategies.
The black line indicates the day we could safely make a decision with proper risk management, by making sure we wait for patterns and signals to completely mature before making a decisive move.
1. On 17 January 22 FTM was trading above $3.00. That day it reached a local all-time-high, meaning on this particular time frame of a few weeks. The resistance trendline formed by price action (1) shows an uptrend.
However, all of my other indicators signaled an imminent failure.
2. Volume was in decline (2). Old school traders used to say wait for volume confirmation, though I see that less and less now. However, in this context, volume is confirming a weakening of purchasing. You can then see, right of the blackline, an increase in selling to present.
3. The relative strength indicator (RSI) showed two signals. A bearish divergence illustrated in the trendline, which is also a failure swing. RSI has been extremely useful in FTM and SPELL recently and I've watched it very closely.
4. The awesome oscillator (AO) showed a bearish "twin-peaks", which diverged from the price action as well. This demonstrated again a weakening in total momentum.
Using all these indicators to back a theory has become a cornerstone of my charting. Price action alone may not have telegraphed this movement, and if you combine that with good money management principles you could trade this. As an investor (long term holder with staking and farming yields) this tells me when to save cash for discount prices. In addition, in tells me not to rely on yields from liquidity pools that are pegged to this asset. Perhaps, if you were so inclined, this would have been the time to rotate liquidity pools to stablecoin farms, or other strategies.
