Bitcoin Shakedown – Still Trending

Trends

Trends – by definition – are when something continues to either rise or fall over a period of time.  For Uptrends we look for price to continue to make Higher Highs and when it pulls back, to make Higher Lows.  For a Downtrend, we look for price to continue to make Lower Lows and when it retraces, to make Lower Highs.

Now the problem lies with what section of Price Action do we analyze to even consider what is trending and what is not.  For example, something may be trending upward for the last 25 years but one of those years it did nothing but go down.  Are we not to count the period in which it went down as a Downtrend?

Macro and Micro

You will very likely hear the terms Macro and Micro used often when an analyst is talking about trends.  This is because he is trying to associate the trend with a Bigger Picture or a Smaller Picture in mind.  

Consider Macro as the Big Picture.  These are more like the overall trend as a whole.  Consider timeframes in the Weekly and Monthly.  

Micro can be under a day.  There may be a micro downtrend on the 5-minute chart but the overall trend is still up.  The good news is that when someone refers to the Daily Trend – they generally just say the Daily Trend.

Then, of course, we also have the Local Trend.  This is another term that is used often and it refers to the most recent price action.  Generally speaking, you would be referring to a trend associated with the most recent candles and on whatever timeframe you have selected.

A trend also needs to make sense and by that I mean, a good trend should be fairly obvious.  When looking at trends, we need to be able to see when the price has clearly changed directions.  We call these turning points or pivot points.  These points are what give us a Swing High or a Swing Low to use in trend formation.  

To sum it up – we want to see a clear advance followed by a clear pullback which is then followed by another clear advance – and so on and so on.

Macro Trend Still Intact

This trend’s first low is back in March of 2020.  We can clearly see that price has gone up and has not gone down enough to break the original Low.  

Furthermore, after the deep pullback from April to July of 2021, the Low remained Higher than the previous Low and the new ATH was enough to trade higher than the previous ATH.

Daily Trend Still Intact

The starting Low in this trend is from July of 2021.  Far more recent than the Macro view.  We chose this as a starting point because it clearly broke away from the preceding price action – which was down.  

After a very clear rise and fall, the price continued to rise again, breaking the previous high and setting the trend in motion.

Local Trend Still Intact

This low starts from September 2021 and could have started from the high in October.  Either way we are trying to stay Local with the action and not keep it too far in the past.  

Again, we are looking for a clear change in direction and we note the Lows and the Highs for each of those segments.  The lows have come extremely close but as of right now, the newest Low is indeed higher than the previous Low.

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