Good morning, traders. Bitcoin attempted to push above $3950 this weekend but could not make it happen. As I have been mentioning, there is strong resistance up toward $4000 and overcoming it won't be a walk in the park. Last night's downward move bounced off the daily 21 EMA, finding support on the HVN. An H1 gap was created around $3888 and RSI just bounced off...
Overbought oversold signals are pretty important when entering a trade, i mostly use it to decide on the position size.
but, it can be seriously misleading in strong trending markets and cause massive losses when used alone.
you can see the massive rally btw 1997-2000 after RSI signaled overbought and kept making new lows...
Here are examples of how I personally use the EFC Indicator signals.
When not to trade - Price & Macd flat, Macd close to 0 level, middle price range
When to trade - RSI divergence, Macd over-extended, price far from ma's