Not a lot of Breadcrumbs to follow

Bitcoin refuses to make a decision

New traders don’t yet appreciate the frustration of Bitcoin at times.  New traders assume Bitcoin is either always going up or it’s always going down but there are plenty of times when Bitcoin simply goes sideways.  It is in these moments we look for clues as to what the next move may be but all too often Bitcoin will leave few if any, clues about where she wants to go next.

Now, to be clear, we are not going sideways at the moment.  We have a Macro Uptrend – meaning that the much bigger picture is still trending up but we are also in a local downtrend – meaning that given the price action of the last few weeks, we are most certainly doing more to the downside than we are to the upside.

Patience and Timeframes

Bitcoin does not need to be in a rush and therefore we do not need to be in a rush either.  The Bigger picture shows an area of support in the 53-49 range and not a whole lot in-between.  Can Bitcoin turnaround from its current location – absolutely – but for that we need to have some patience and zoom in on the charts to see if there is anything going on that we can’t see from the Daily.

Above we are looking at the H4 Chart and still there is nothing obvious, except the fact that Bitcoin is indeed trending down.  We can take some measurements to try to get a sense for the strength and what we see is interesting.  
The first drop was about 10% while the second was about 16%.  This tells us the Bears are getting stronger – not weeker.

But then we measure the Bullish Bounce and we can see the Bulls made a 6.5% bounce first followed by an 8% bounce second.  This second bounce indicates that the Bulls have more strength the second time around than the first.

Unseen Patterns

Another good thing about zooming in is that you can uncover patterns that are otherwise too hard to see.  There are times when hourly patterns play out and they are nothing more than a stepping stone into another Bigger Pattern on a higher timeframe.

What we have here is a “W” pattern or a double bottom – again, on the H4 Chart.  We find a very similar area of Support in a clear downtrend.  That level of support is tested twice and holds.  So instead of the trend continuing to make a lower low – something holds it up instead.
When that is the case, we look for a bounce back to the previous reversal – the most local high before the second bounce.  If that is to get breached – we take a measurement from the bottom of the “W” to the midpoint and we add that measurement to the midpoint.  This gives us a measured move or a local target from which we can trade.

These little things are the things traders use to help them make trading decisions.

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