"The only thing I know is that I know nothing" - Socrates
What will happen next doesn't matter, what matters is your strategy and how you can take advantage of price actions.
Let's have a look at Bitcoin market through different timeframes (M1;W1;D1;H4)
Starting by the monthly chart, we can see that BTC is in a long-term bullish trend since 2013 and is as of today in an overbought situation. On the weekly chart BTC is also overbought but what is interesting to see is that the RSI level of 80 was broken in the last downward movement. This level of 80 use to be an important support to the mid term bullish trend since the beggining of the year.
But for me the best is yet to come on the D1 and H4.
The daily chart is showing us that when BTC crossed up the RSI level of 50 (neutral zone) during October 2020, it kicked off the current bull run and since then the neutral zone use to support the trend and indicate higher low points. In the past days, this crucial level of 50 on the RSI D1 broke, validating a huge bearish divergence on the D1 chart (while the price formed a lower low point after breaking the trendline in green).
However, as of now on the H4 chart, we can see a pattern of indecision (triangle) that started after the drop below the trend line (in green in the D1 and H4 chart).
Will the price cross up the triangle? Will it cross down? Nobody can predict it at 100%. However, what each trader can do is to have a defined strategy that takes into account each probability.
My primary scenario is bearish, due to the validation of the bearish divergence on the D1 chart, in an ouverbought context on the long term charts (M1,W1). If the price cross down the triangle pattern, it could lead me to open a short position.
However, this primary scenario could be invalidated by the bullish divergence on the H4 chart, that could lead, if the signal is validated (by crossing up the RSI level of 50 on the H4 chart) to a new high point (Lower high or even new ATH on the D1 chart). In that case I would wait for more signals before opening a long position.
This was my first post guys, hope you enjoyed it.
PS: This is NOT an investment or trading advise, just my opinion.
Brindfrappe
What will happen next doesn't matter, what matters is your strategy and how you can take advantage of price actions.
Let's have a look at Bitcoin market through different timeframes (M1;W1;D1;H4)
Starting by the monthly chart, we can see that BTC is in a long-term bullish trend since 2013 and is as of today in an overbought situation. On the weekly chart BTC is also overbought but what is interesting to see is that the RSI level of 80 was broken in the last downward movement. This level of 80 use to be an important support to the mid term bullish trend since the beggining of the year.
But for me the best is yet to come on the D1 and H4.
The daily chart is showing us that when BTC crossed up the RSI level of 50 (neutral zone) during October 2020, it kicked off the current bull run and since then the neutral zone use to support the trend and indicate higher low points. In the past days, this crucial level of 50 on the RSI D1 broke, validating a huge bearish divergence on the D1 chart (while the price formed a lower low point after breaking the trendline in green).
However, as of now on the H4 chart, we can see a pattern of indecision (triangle) that started after the drop below the trend line (in green in the D1 and H4 chart).
Will the price cross up the triangle? Will it cross down? Nobody can predict it at 100%. However, what each trader can do is to have a defined strategy that takes into account each probability.
My primary scenario is bearish, due to the validation of the bearish divergence on the D1 chart, in an ouverbought context on the long term charts (M1,W1). If the price cross down the triangle pattern, it could lead me to open a short position.
However, this primary scenario could be invalidated by the bullish divergence on the H4 chart, that could lead, if the signal is validated (by crossing up the RSI level of 50 on the H4 chart) to a new high point (Lower high or even new ATH on the D1 chart). In that case I would wait for more signals before opening a long position.
This was my first post guys, hope you enjoyed it.
PS: This is NOT an investment or trading advise, just my opinion.
Brindfrappe