Jump to content

Bitcoin Trend Following By TrendFollower

Recommended Posts

@PJ19,

I have no idea if what you think will happen based on this chart will happen or not. The one thing I know is that Cryptocurrencies are unpredictable at the best of times. Also there are no rules or regulations that force Bitcoin's price to behave according to Elliott Wave Theory or any other technical analysis (though I accept it might end up following it). Historical price action does not necessarily lead to future price behaviour. 

For me I entered my Bitcoin 'Long' trade a while back and have been holding my trade and adding to it to date on any major dips. I have paid the daily overnight charges and am not worried about the short term price movements, volatility, market noise, so called Crypto expert predictions, complex technical analysis, etc. I have just held. This is the beauty for me of trend following. It allows me to take a directional position and then I can use my spare time to do what I want. I don't have to worry any complexities day to day. My exit will be executed on a trend reversal based on my parameters (which is slightly wider than text book) just so I do not get caught by any false reversals (to catch stop losses being triggered). 

Share this post


Link to post

It seems Bitcoin is heading towards the 'daily' recent low of around $10.4k level based on the current price action. The $10k level is crucial as if Bitcoin cannot defend that for a second time then I fear it may open the floodgates for further bearish price action.

A crucial time is coming for the current Bitcoin upward trend. It has gone below its 20 DMA which is a short term bearish signal.

$9.8k on the 'daily' represents the 50 DMA. If this is breached then it could leader to a deeper downward dive in terms of price action due to 'amplification' which in my terms is profit taking + stop losses being triggered + short positions increasing. 

Share this post


Link to post

Updated chart, i'll know soon enough  if this is indeed playing out as a contracting triangle

13.07.19a. btc-alt, contracting triangle and off in e.PNG

Share this post


Link to post

Bitcoin went down to $10.7k overnight but is back up over $11k this morning. It seems to be gaining support at $11k which still exists. That foundation may be the base for the next projected move upwards. 

Share this post


Link to post

Updated chart with key support levels.

Personally, i'm looking for the 9,900 level to hold, and up from there.

Breaking that 9,653 line, then next support zone is at the 8,600.

If that zone (8,600) is breached, then next support at the 7,650.

1227830958_14_07_19.btcwithkeylevelsofsupport.thumb.PNG.4da249ffc2a853b066ef94cf74d9a292.PNG

Share this post


Link to post

Update re above charts.

Market is finding support here, i have now closed out my short positions, and have started opening up on the long side.

Share this post


Link to post

@PJ19,

Interesting. It seems Bitcoin found support at $10,295.00 but the strength of the price action is so strong that I now cannot rule out further downward price action. I do not know what will happen overnight or tomorrow morning but the momentum seems to be with Bitcoin's price declining but it can turn in the matter of minutes and catch a lot of traders off guard. 

Normally with such solid declines over the course of days Bitcoin tends to bounce big. It will be interesting to see if Bitcoin can hold that crucial $10k level. 

Share this post


Link to post

Update re above charts.

Market is finding support here, i have now closed out my short positions, and have started opening up on the long side.

Confirmation of an advance up, would then allow for additional entry point on the initial pull-back. 

Share this post


Link to post

@PJ19,

I myself would play it slightly differently in that I would wait for the confirmation of an uptrend before adding to my position (adding on the dips as the price reverses back upwards). 

This will have no doubt scared a lot of traders and wrong footed them. This is extreme price volatility and extreme amplified price corrections at its best. Many traders who have experienced trading Bitcoin will have experienced this many times. 

I think the 'alt coins' are being hammered far more at the moment as they are even more riskier than Bitcoin. 

This coming week should be interesting. I still think those who are short should hold their shorts until there is a clear indication of a reversal. This could involve fake reversals and all sorts so it is going to be extremely challenging for more shorter term traders but this is where their skill and ability will come in. Not easy that is for sure. 

Share this post


Link to post
6 hours ago, PJ19 said:

Update re above charts.

Market is finding support here, i have now closed out my short positions, and have started opening up on the long side.

Confirmation of an advance up, would then allow for additional entry point on the initial pull-back. 

Have traded within this price range. Now looking like we're going lower, into that 9,900 to 9,700. Let's see if that holds. All as per above chart.

Share this post


Link to post

Bitcoin touched $9842.20 so it is touching new lows at the moment. It is currently trading around the $10.2k level at 5:00 am in the morning but is looking rather bearish to me.

The 50 DMA on the 'daily' is in danger of being breached which if it is will trigger further downward price pressure in my opinion. 

Share this post


Link to post

I'm trading this bounce, and i'll wait and see if the below plays out as more a bounce rather than a move higher.
I'll be locking-in profits either way.  

btc 10 min chart, is this a bounce or start of a wave c in a triangle. This however to me is looking more like an a,b,c move, target as shown. If we get above that 10,750 line then perhaps the triangle is playing out. 10 min chart with fib extensions as well.
It is very possible that we head lower into that 9,000 and below

1797954392_15_07_19.btcpossiblebounceon10minchart.thumb.PNG.2c2ba1a616ebe7c41552692c5ab178a6.PNG1517962743_15_07_19a.btcwithfibextenon10minchart.thumb.PNG.1291bf4805c1249cb18dc433dd8a86f1.PNG

Share this post


Link to post

@PJ19,

The longer term trend for Bitcoin is just about in tact. I say just about as based on current price action there is now a larger risk than previously of Bitcoin going down further which is being supported by price action and momentum.

It will be interesting to see if your analysis leads to your predicted scenario. 

  • Like 1

Share this post


Link to post

Agree with that.

The market has a good way of turning round quick, especially btc, and in this scenario, there are going to be lots of shorts in play right now, so they could just turn this around and take those out.

The next few hours should give us direction.

If price gets above 10,735-50 then it's probably confirmed.

Let's see how it plays out indeed.

Have a great day, as it's a local holiday here, i'll probably head out into the country for some chill time.

Share this post


Link to post

@PJ19,

Oh ok. It was that you mentioned local holiday so I assumed you were outside the UK. Possibly on a vacation in a foreign country?

Share this post


Link to post
5 hours ago, PJ19 said:

I'm trading this bounce, and i'll wait and see if the below plays out as more a bounce rather than a move higher.
I'll be locking-in profits either way.  

btc 10 min chart, is this a bounce or start of a wave c in a triangle. This however to me is looking more like an a,b,c move, target as shown. If we get above that 10,750 line then perhaps the triangle is playing out. 10 min chart with fib extensions as well.
It is very possible that we head lower into that 9,000 and below

1797954392_15_07_19.btcpossiblebounceon10minchart.thumb.PNG.2c2ba1a616ebe7c41552692c5ab178a6.PNG1517962743_15_07_19a.btcwithfibextenon10minchart.thumb.PNG.1291bf4805c1249cb18dc433dd8a86f1.PNG

Have looked at wave count, and looks like we're in a corrective move higher, it no longer looks like an abc move, but rather first leg up in a bigger a move ahead. will update chart later, as busy with other stuff right now. 

Share this post


Link to post
21 minutes ago, PJ19 said:

Have looked at wave count, and looks like we're in a corrective move higher, it no longer looks like an abc move, but rather first leg up in a bigger a move ahead. will update chart later, as busy with other stuff right now. 

... bigger move higher ahead into that D move

Share this post


Link to post

@PJ19,

This is a fascinating battle we are witnessing with those who are bullish on Bitcoin and those who are bearish. 

The question is whether Bitcoin’s correction is setting itself up for a larger move upwards as there could be an aggressive short squeeze imminent. 

I still think Bitcoin’s upward move is not done yet I am expecting it to revisit $20k in the coming months. I think September to December is going to be very interesting.

Share this post


Link to post

It seems Bitcoin is trying to push through an upward move. This may be a short covering move. There is not enough positive news right now for Bitcoin to push above $12k and stay there so I see the possibility of Bitcoin either participating in a volatile range bound activity or further declines in the short term. My view longer term is that Bitcoin will go for the $20k level once more positive Bitcoin news is released to the market. 

Share this post


Link to post

Well Bitcoin is currently in a downtrend move. 

It was trading below its 20 DMA but it is now below its 50 DMA which confirms a downward trend right now. The chart below highlights this through a simplistic visual without lots of arrows, lines and complexity for those who are new to trading or are struggling to use technical indicators on a more simplistic level.

Bitcoin_20190716_18_39.png.ead94d56053c956f0095cc4f875b0f66.png

Based on current price action and momentum it seems $8k is where Bitcoin seems to be heading unless there is some very positive news on Bitcoin or something significant happens or is released through online media news that changes Bitcoin's path pretty much immediately. Anything above $6k still keeps Bitcoin above its 200 DMA and the longer term trend in tact just about by the skin of its teeth. This is all based on the 'daily' chart / timeframe.

Share this post


Link to post

I think if the current strength and momentum on the downward price action continues then it could bottom somewhere between $7k to $8k in my opinion. 

Share this post


Link to post

The question now is will Bitcoin go over $10k in what seems to be a 'short covering' rally?

Share this post


Link to post

There you go Bitcoin hit $10,006.70. Once this is over there could be another leg down or Bitcoin could wrong foot a lot of traders and go back up. 

Those who really do control the price of the Crypto markets know and understand exactly how the majority of traders are going to think, which technical analysis they are going to use and I believe the market will behave differently to what can be predicted using some of the trading theories out there which are widely used by a lot of traders.

Looking at current price action another leg downwards seems feasible. 

Share this post


Link to post

If the saying,'Trend is your Friend', is believed then the current trade based on price action is 'Shorting' Bitcoin.

A lot of people think Bitcoin is junk and is going to zero. These are the very people that should be profiting from Bitcoin as IG allows them to 'Short' Bitcoin very easily and without any liquidity issues. Using their risk management on the assets they trade, this can be applied pretty easily for Bitcoin eliminating any excuses one has for not 'Shorting' Bitcoin which is trending strongly (based on price action and charts) at the moment. 

This is impressive and IG should be complimented on making this process seamless rather than seeing messages that state that an asset is available 'Long' only, etc. I have seen this on many other assets and also on Bitcoin around two to three years ago when IG first introduced Cryptocurrency trading on their UK platform. 

Share this post


Link to post

Well Bitcoin does not fail when it comes to surprising. It has a knack of performing rather strongly over the weekend and this Saturday evening is no different (UK time). 

 

Share this post


Link to post

When you look at the 'monthly' and 'weekly' charts then you will see that the real long term trend is down and bearish. It does not look positive. I totally accept that. For any other asset I would say it seems rather bearish as it infers to me further downside. 

Bitcoin_20190725_12_17.png.6f7fab0c709b0948905cf48de26e410b.png

Bitcoin_20190725_12.17-2.png.51fabaac96565b6cb474344a394969e5.png

However, this is Bitcoin and I believe we are seeing the start of a new 'Digital Revolution' where Cryptocurrencies, Digital Currencies and Tokenisation along with Blockchain will create a new future not tied to how historically other more traditional assets would have performed after such a parabolic rise and bubble. I think there is a strong chance that Bitcoin could create a new future price action and behaviour which many simply cannot conceive is they stick to theory in technical analysis books or listen to the media who change their story every time Bitcoin moves up or down.

 

Share this post


Link to post

Bitcoin has hit $10k but for me the question now is how much lower is Bitcoin going to go before this current correction / consolidation completes?

Until this is complete the next leg upwards cannot resume. Have we seen the low of around $9.4k or is there further downside towards $8k? I do not know the answer but current trend weakness and bearishness could mean a further decline. This is why I do not try and trade short term price movements as trading extreme volatility takes some serious skills which I do not have the time to execute.

When I am long in a position the only thing I try and do is add to my position on any dips and pyramid upwards. I try and do the same on any short positions on any price rises during a downtrend. 

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Member Statistics

    • Total Topics
      7,234
    • Total Posts
      35,854
    • Total Members
      45,832
    Newest Member
    tigotrader
    Joined 17/08/19 17:40
  • Posts

    • Going back to my FTSE analysis I see things as follows: 2 scenarios present themselves, other than fresh ATHs that is: 1) the move down to the turn on Thursday was a wave 1 (blue) off a larger scale wave 2 (purple) that should retrace, maybe in a complex fashion with a lot of whip saw price action maybe not, let's see; 2) the recent rally and drop to a new low was a 1-2 (red), which indicates a much stronger leg down is immanent. The #2 scenario would only be valid if price holds below the previous high (circa 7300).  I favour the #1 scenario. There was PMD on the 4H chart at wave 1 (blue), which suggests this is a turning point.  Also the 4H chart shows a 1-5 wave down to the 1 blue, which would be motive and suggests a trend change to the bearish side. There was strong NMD at wave 2 (Purple) which is consistent with a large scale retrace move. Just as with the US large caps, after the stop and turn up there was a sharp retrace drop to the Fib 76/78% zone before the current rally.  As the FTSE was in out of hours at the end of the week this market has not rallied as hard as the US markets.  Also we may yet see fresh ATHs on US large caps while the FTSE100 only puts in a counter trend rally. If we do see fresh ATHs on US large caps and only a retrace on FTSE and probably Dax and Nikkei as well then comparing these markets will be instructive for calling that top on US large caps.  We may, alternatively, see only a retrace on US large caps too if the top of the market in already in. Conclusion: we can anticipate a bullish period on all major indices BUT should guard against a quick reversal on FTSE 100 that would set up scenario #2.  Either way this market looks to have topped out so the coming months though to the Autumn will be critical to deciding things on all indices, and likely quite a few other markets. I am Long the FTSE 100, coincident with my Dow Longs and will swing this up for now but my bearish bias for the long term will keep we watchful for a break down of this rally and I will not be pyramiding this one, far too risky until things are resolved.
    • "....more broadly we have seen currency wars but these have not really captured the imagination of the MSM yet" Actually I'd argue we have had currency wars for some years already. History shows it goes in the following order: Currency war, Trade war, War. (Regrettably).  If I recall correctly the market falls of early 2015 (about 20% down) were blamed on Yuan being devalued by Chinese manipulation. Way before Trump! "....we suddenly get a super massive set of central bank policies that drop rates to zero" Again I'd say that has been going on for some years. Arguably you could say about 35 years since the Plaza Accord. Once fiat became unaccountable (no gold standard) the politicians proceeded to spend, spend spend =debt,debt,debt. Expect MMT  (US Democrats pushing modern monetary theory) to allow them to continue in that vein. Again history says these currencies will all eventually disappear, like species, approx 95% no longer exist.  Broadly I agree with what you say. The present financial system is critically sick that's for sure. It has propped up assets with huge doses of QE and zero rate interest policy (expect more of that when the ECB meets next month). You are correct about the size of stock markets. If the global market was a horse the bond market would be three legs of it! I digress.... However, if you are faced with massive debts then here are your options: 1) Default - Argentinian/Zimbabwe style. Not likely, at least until all other options tried - as that's the end game. 2) Grow the economy at a fast enough rate to meet and exceed future repayment obligations. In a global low anaemic growth environment? Unlikely. 3) Inflate like mad. It's the only viable option. You could, reasonably say, that after 3 massive QE sessions and ZIRP and now  NIRP that deflation is winning. Arguably it's all been a waste of time / money. Where's the kitchen sink? Presumably more of the same and then some helicopter money? It seems to me that this is more in line with Japan (targeted 10yr bond rate = 0%) which someone said in the 90s was  "...the dress rehearsal. The rest of the world will be the main event". Trying to get inflation without destroying the USD global reserve status is unlikely in my opinion and you can't help but feel that some sort of Bretton Woods global RESET will eventually emerge. It's certainly what Russia, China, Syria, Iran, Turkey etc are angling for.....and their central banks have been big buyers of bullion recently. That's why I'd recommend holding gold. Not as a trading strategy (which is what I appreciate this forum is). Nice sharing these thoughts with you>
    • So it looks like my crazy set of channels on the Daily chart is still holding well.  The breakout of the last channel line, which coincides with a nice zone of lateral S/R was retested but failed as I noted in my previous post.  I got Short off an initial rejection from this zone and Resistance line with a tight stop but price never came back so nicely in on a couple of Short positions and stop protected at BE.  Price moved back through the monthly lower channel line (purple) and put in a quick daily candle failed retest and dropped away.  It is possible we could see another retest of this resistance zone before any further move but a break below the 5760 level would be indicative that the Bear has resumed and obviously a break of the previous low around the $56 mark would once again bring $50 into focus.  
×
×