Jump to content

Bitcoin Trend Following By TrendFollower

Recommended Posts

@Carlomaltings,

Thank you for your post. Apologies but I missed it and have only just seen it. 

I think from a 'moving average' perspective and based on risk/reward there is nothing wrong with going 'long' on Bitcoin at this juncture based on this and other technical indicators and signals.

If you are wrong and Bitcoin reverses downwards and continues its longer term bearish trend then as long as you have sound and robust risk management with effective stop losses in place then the trade set up is on for the high risk traders who want to get in early before any trend is confirmed. The aggressive traders will have already started entering the 'long' trade way before the trend followers began to consider joining the party. 

Share this post


Link to post

I posted on my Bitcoin - Price Behaviour thread but felt it relevant for this thread too that Bitcoin on the 'daily' is still making a series of 'Lower Highs' which is bearish. 

If you draw trend lines on the 'daily' then there still is the potential for another move down into the $6k's for Bitcoin. This cannot be ruled out. Bitcoin would need to break out of the current trend channel for the likelihood of this decreasing. 

  • Like 1

Share this post


Link to post

As I suggested last week to @Carlomaltings there was nothing wrong with going 'long' Bitcoin last week and boy has Bitcoin trending strongly. 

I have mentioned on several of my threads it is about identifying the 'Strongest Trending Assets' and for dedicated Crypto traders it is about identifying the 'Strongest Trending Crypto's'

Bitcoin has started to deliver at the start of 2020. 

Share this post


Link to post

Bitcoin has crossed its 200 DMA which is a very bullish signal. For me this will encourage more buying pressure on the 'long' side for Bitcoin thus driving the price up higher. I am expecting some correction and drop and maybe a consolidation but this may happen once it blasts through $10k rather than before. I am not sure on this but that is a feeling I have at this moment in time but the price action may prove me wrong.

Bitcoin_20200119_09_17.thumb.png.04d804e429abdabed9da9e6c08490c7d.png

Share this post


Link to post

It looks like the CME Gaps have been potentially filled hence this current rise upwards. 

It is touching its 200 DMA on the 'daily' so as long as Bitcoin can stay above $8.9k then it will be a very bullish signal/indicator. 

Share this post


Link to post

If you look at the moving averages on the 'daily' then you will see that the 200 DMA is sloping downwards which is line with the longer term downtrend still in play. The 20 DMA is sloping upwards showing the the more recent price action is bullish. The 50 and 100 DMA's are looking like they want to slope upwards and are heading in that direction. When they eventually do then the key will be that 200 DMA curve. Once that begins to slope upwards, GAME ON.

It will be a confirmation to me that Bitcoin's longer term downtrend is switching towards an uptrend. This signal/indicator will occur after the event as it will be 'time lagging' indicator. 

Bitcoin_20200129_05_38.thumb.png.0e8d80d04fc91b0f8396cad069e45942.png

Share this post


Link to post

The 'Aroon' indicator is suggesting a potential trend change as you can see below.

Bitcoin_20200129_20_45.thumb.png.4282c13aef3b8a70d8db25552721742f.png

The 'Aroon' up line is above the 'Aroon' down line so therefore the overall trend is showing as upwards at this moment in time. When you look back at when Bitcoin was trending upwards and then compare the 'Aroon' up and down lines then you will see this more clearly and hopefully it makes more sense. 

Share this post


Link to post

I love the 'Lower Lows' and 'Higher Highs' being formed on the 'daily' after the period of consolidation. It seems like Bitcoin is going to trend towards and past $10k shortly. 

Bitcoin_20200205_19_23.thumb.png.cd5bcc04c3a59065ddcb86b187da2961.png

Share this post


Link to post

I see Bitcoin's price and trend to continue into the 'blue rectangle' which I highlight on the 'daily' chart below:

Bitcoin_20200207_05_31.thumb.png.7dcbdb93b7433f3f0c0fd3cd33fc2b31.png

Share this post


Link to post

If Bitcoin drives past the 'blue rectangle' price area then it will move towards $11k where it will be faced with some challenges. If we see a new 52 week high then the upside potential is going to be phenomenal. If Bitcoin cannot break above this 52 week high then it could provide disastrous for Bitcoin. So there is still all to play for with Bitcoin. 

Share this post


Link to post

When traders trading a longer trend use tight stop losses on the likes of Bitcoin et al then they can get themselves into a bit of a pickle. Tight stop losses when using trend following principles on Cryptocurrencies does not seem to be effective in my personal opinion. The stop losses need to be wider but this means potential losses or decline in profits could temporarily be larger. However, this is not to be feared if you have called the 'DIRECTION' right and are trading with the 'TREND' and not against it. 

Share this post


Link to post

Bitcoin's price is above its 20, 50, 100 and 200 DMA's on the daily. That is the price level for me which it must remain above.

The trend is still upwards but when you zoom out of the daily you will see that the longer term trend of downwards is still in tact. Until a reversal in this is seen then the danger remains thus leading to high risk at this moment in time. 

Share this post


Link to post

I was just reading that apparently around 90% of gaps get filled on CME for Bitcoin. 

Share this post


Link to post

@CharlotteIG,

What we are seeing now is 'Risk Off' and therefore capital is flowing out of the highest risk assets and Bitcoin and Cryptocurrencies are one of the highest risk assets around. Therefore this is not surprising at all. The smart traders will be shorting Bitcoin et al. They will also be using leverage to maximise their profits on their shorts. Just look at today's decline plus using leverage and you can see why Cryptos are a dream to trade. 

I think right now Cash is king and Bitcoin is certainly trending strongly downwards so one must not trade against the trend in such scenarios.

Share this post


Link to post

For me when you look at the 'Monthly' and 'Weekly' charts for Bitcoin then it is telling me a slow and painful road downwards with lots of spikes (false move upwards) but ultimately heading downwards. 

I want to see the longer term trends for Bitcoin on the 'Weekly' and 'Monthly' change (sort of like Gold) to be more bullish right now on Bitcoin in terms of a longer term view. I do not doubt there are short to medium term trending potential and trading opportunities but longer term I am not yet convinced based on the technicals. I am more convinced on the fundamentals but unfortunately trading decisions cannot be made solely on fundamentals. The technicals need to align with the fundamentals with for me we are not there yet with Bitcoin and this could be months/years away. 

Share this post


Link to post

The '4 Hour' chart for Bitcoin seems to be showing a period of consolidation right now before it decides on its next course of action, up or down. 

Bitcoin_20200319_07_00.thumb.png.0def88c982c2e53e225a4320905bc8c0.png

Share this post


Link to post

Hi TrendFollower

First of all, thanks for your very informative posts that I have read to date. I haven't traded bitcoin before and wanted to clarify if it is only traded in USD? 

As I work in AUD and the exchange is very low at the moment, I felt that it would drastically offset possible gains if that is the case.

Cheers Ray

Share this post


Link to post

@RamonF,

On IG's UK Spread Betting platform yes it is only traded in USD. IG used to offer Crypto's about two years ago in GBP but they scrapped that option pretty quickly if memory serves me right. 

Share this post


Link to post
On 04/07/2019 at 05:35, TrendFollower said:

Bitcoin's current trend is weakening. Now it could either be a consolidation move before the next leg upwards or potentially the beginning of a trend reversal. 

Follow the price action to see exactly which it is and test it against what the so called media experts are predicting via online media channels.

What online media channels do you listing to? for the record a big time move to the downside as I have only just read this thread now..I have tried on bitcoin but it does scare me as it can moce so much in one day. I guess you need a longer stop loss in?

Share this post


Link to post

@Trevbeats,

I do not 'listen' to any online media channels! Research 'Market Noise' and embrace this concept. It will serve you well. I am not saying that I do not 'read' material online but my trading decisions are primarily based on price action and technical signals/indicators. For Commodities I do use Fundamentals as well. 

In terms of stop losses then it is a complex one because we all have different trading strategies and some do not even have a trading strategy! For me because I use trend following principles then if I were to have my stop losses too tight then the volatility would stop me out even if my directional trade was right. I try and keep wider stop losses but my risk tolerance is higher enough to stomach that level of risk. Not everyone has a risk management strategy that can cope with higher levels of risk based on wider stop losses. It is difficult as I want to minimise my losses and maximise my winners so there is a trade off and finer balance required. 

  • Like 1

Share this post


Link to post

If Bitcoin can close above $7k then it will be looking at crossing its 20 DMA on the 'daily'.

This is where the highest risk traders may go long or the higher risk trend followers may initiate long positions trying to get in as early as possible. 

Bitcoin_20200321_16_25.thumb.png.426c19a8f416889185d1094d89a2992a.png

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
      8,947
    • Total Posts
      48,853
    • Total Members
      61,873
    Newest Member
    DrJackD
    Joined 01/04/20 21:40
  • Posts

×
×