Near Term group of timeframes: (1d, 2d, 3d, 4d)
In all this group of timeframes the Green EMA is higher than the Energy indicating bullish sentiment overall, however things are not completely clear in these timeframes and although upward pressure appears to be the dominant driver there are also indications that we are likely to see periods of downward pressure within an overall bullish mood as one would expect. Currently in the daily our last close saw the Red RSI & Blue LSMA make contact with the Green EMA as it falls toward level 50 and as a result the Energy fell below 50 at the start of the current candle - this was predictable and indicates the start of a period of local downward pressure. The Red RSI in the daily has also turned back down and looks at risk of crossing bearish below the Blue LSMA based on current trajectory - though this is not guarranteed to happen and can turn back up. If the Green EMA closes below 50 we are likely to see the price actioin fall to the vicinity of the Bollinger Band basis (currently $0.023) In the 2d as dictated by price action the Green EMA has also turned down as has the Energy. Also based on current trajectory, the Red RSI and Blue LSMA may make contact with the Green EMA as it falls and the Red RSI currently looks about to cross bearish below the Blue LSMA, this would confirm a further period of downward pressure. These are just possibilities and we can easily reverse back up - we need to monitor shorter timeframes to monitor this position. In the 4d the Energy has just crossed below level 50 also indicating downward pressure, however, looking at the shape at the bottom of the Energy it does seem to be curving out slightly and we could see a very small short lived dip, this is in my opinion likely when considering the fact that the Red RSI and Blue LSMA are pointing up and the Red RSI has crossed bullish above the Blue LSMA and the fact that in the 6d the Energy has a bit of a way to go still before exhausting and crossing below 50 - we are currently at level 76.5 - I would be cautious as we drop below level 65.
In the short term group of timeframes ( 90m, 3h, 6h, 12h)
The Energy is higher than the Green EMA in the 90m & 3h indicating bearish sentiment. We are likely to see lower lows and lower highs in these timeframes respectively until this position changes. In the 6h the Red RSI has crossed bearish below the Blue LSMA.
For upward pressure to resume we need to see it propagate up through the timeframes beginning for now with the 6h where we have seen a downward pressur race triggered.
When the Red RSI fell below 50 in the 6h a downward pressure race was triggered. In order for upward pressure to resume, we first need to see the Energy in the daily CLOSE above 50 in the 6h before the Red RSI in the 12h CROSSES below 50. If the Energy does win the race, we need to see the Green MA higher than the Energy in at least the three preceding halved timeframes from the timeframe in which the race was triggered. If the Red RSI wins we then have a race between the Energy in the 12h and the Red RSI in the daily etc. This downward pressure race has cascaded up from lower TFs. Until the Energy decisively wins the race, we do not have a chance for reversal to upward pressure in the relevant timeframes.
Bear in mind that we have to monitor these indicators closely and take them step by step.
And that the position will be influenced by BTCUSD...
Please see related idea below.
As mentioned in previous publications, these markets can change with very little notice. These changes initially manifest themselves in the lower timeframes and propagate up through the timeframes. Nothing is set in stone. Unless you are day trading, you cannot benefit from these early warning signals.
As always - this is not financial advice but just my view of current market dynamics.
One has to be aware that analyses are done on the basis of what the indicators are saying at the time and things can change. It is important to always monitor the scalping group of timeframes as we will see changes propagate up from there.
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Trade safe
aBL
Comment:
Just a quick update to point out that, as expected, the Energy in the 6h won the downward pressure race against the Red RSI in the 12h, however, resumption of upward pressure has not been confirmed because the criterion (that the Green EMA needs to be higher than the Energy in the three halved timeframes preceding the one in which the race was triggered) has not been satisfied. The Energy in the 3h & 90m remains higher than the Green EMA. I mentioned that I expected the Energy to only slightly dip below 50 in the 4d, as it turns out it did not even make a close below 50 and has turned up again, this is a bullish sign. Particularly as we see the Red RSI and the Blue LSMA making contact with the Green EMA as it rises. We would like to see a close in this position in 2d & 9h.
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