BTC - needs to Invalidate the H&S Pattern on the 6d Chart
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BTC is potentially in a Head and Shoulders Pattern on this 6d chart, and you can also see clearly this on the weekly as well.
Ideally, BTC needs to CLOSE this 6d Candle above the Dashed Resistance Line at around $53,148. If not, then the next 6d Candle will suffice. Failure to do so may validate the Right Shoulder and if BTC drops below the H&S Neckline then a potentially much bigger drop can be expected.
BTC is still below its Bollinger Bands Middle Band Basis 20 Period SMA on this 6d timeframe. Note that the Upper and Lower Bollinger Bands are moving sideways.
Note that BTC is still below its Least Squares Moving Average (LSMA) for this 6d timeframe. Be on the lookout for a 6d Candle CLOSE above the LSMA as that will be a BUY signal for traders who use this indicator on this 6d timeframe.
BTC is still above its Volume Profile Fixed Range Point of Control (VPFR POC) for the Fixed Range of 4x 6d Candles that i have selected. We 100% need BTC to CLOSE this 6d Candle above this level.
Note that the Volume Profile Visible Range Point of Control (VPVR POC) for this charts Visible Range is at $56,375 so BTC is not that far away from it. We can expect some resistance around this level.
Volume is still low on this Bitstamp 6d Chart and note that the last 2x 6d Volume Bars have been below its Volume 20 Period SMA.
I have highlighted 2 potentially crucial Support Areas for this 6d timeframe. The first is at $40,879 - $39,511 and the next one is $31,037 - $28,622.
Let’s take a look at 3 Momentum Indicators, the STOCH, MACD and the ADX DI and see what each is actually indicating:
If we take a look at the Stochastic Indicator (STOCH), The %K Line (Blue Line) is indicating that momentum is upwards at the moment. The %K Line (Blue Line) is still relatively low and has a lot of room to move up before breaking into the Overbought Zone above 80 on this 6d timeframe. Note that at the moment the %K Line (Blue Line) is above its %D Line (Orange Line).
If we look at the Moving Average Convergence Divergence (MACD) we can see that the MACD Line (Blue Line) is still under its (Signal Line). We need the MACD Line (Blue Line) to cross back above the Signal Line (Orange Line) as this will be a BUY SIGNAL for this indicator on this 6d timeframe. Not that the MACD Line (Blue Line) is still above the 0.0 Base Line in the Positive Zone.
If we look at the Average Directional Index (ADX DI) we can see that Negative Momentum has dropped with the -DI (Red Line) at 21.72 and Positive Momentum has risen with the +DI (Green Line) at 17.55. Note that the trend strength has lost a bit of strength with the ADX (Orange Line) dropping to 21.67 and it is still below its 9 Period EMA (Black Line) which is at 23.61. We need the ADX (Orange Line) to stay above the 20 Threshold (Dashed Black Line) and we need the +DI (Green Line) to cross back above the -DI (Red Line) on this 6d timeframe for any LONGTERM recovery to become sustainable and real.
Note that all of these indicators can be used and applied in whatever trading timeframe you are in.
So what does all this mean. Simply put…. BTC needs to CLOSE above the Dashed Resistance Line.
If you are waiting for full Bullish confirmation on this longterm 6d timeframe, then be on the lookout for when BTC manages to CLOSE a 6d Candle ABOVE the Dashed Resistance Line invalidating the H&S Pattern.
After that, we need BTC to break back above and more importantly CLOSE above the Bollinger Bands Middle Band Basis and then the LSMA on this 6d timeframe. Also be on the lookout for any successful re-test of a previous resistance as support.
Note that there is always a possibility that if BTC cannot break above and more importantly CLOSE above the Dashed Resistance Line, then it may still invalidate the H&S pattern by ranging sideways within a range for a prolonged period of time.
I hope this is helpful with your Trading and Hodl-ing.
Notes:
LSMA = Black Squiggly Line on chart
Bollinger Bands = Yellow Bands on chart
VPFR POC = Short Horizontal Red Dotted Line on chart
VPVR POC = Long Horizontal Red Dotted Line on chart
Support Areas = Black Horizontal Lines with Yellow Shading on chart
H&S Pattern = You know where that is ;-)
Ideally, BTC needs to CLOSE this 6d Candle above the Dashed Resistance Line at around $53,148. If not, then the next 6d Candle will suffice. Failure to do so may validate the Right Shoulder and if BTC drops below the H&S Neckline then a potentially much bigger drop can be expected.
BTC is still below its Bollinger Bands Middle Band Basis 20 Period SMA on this 6d timeframe. Note that the Upper and Lower Bollinger Bands are moving sideways.
Note that BTC is still below its Least Squares Moving Average (LSMA) for this 6d timeframe. Be on the lookout for a 6d Candle CLOSE above the LSMA as that will be a BUY signal for traders who use this indicator on this 6d timeframe.
BTC is still above its Volume Profile Fixed Range Point of Control (VPFR POC) for the Fixed Range of 4x 6d Candles that i have selected. We 100% need BTC to CLOSE this 6d Candle above this level.
Note that the Volume Profile Visible Range Point of Control (VPVR POC) for this charts Visible Range is at $56,375 so BTC is not that far away from it. We can expect some resistance around this level.
Volume is still low on this Bitstamp 6d Chart and note that the last 2x 6d Volume Bars have been below its Volume 20 Period SMA.
I have highlighted 2 potentially crucial Support Areas for this 6d timeframe. The first is at $40,879 - $39,511 and the next one is $31,037 - $28,622.
Let’s take a look at 3 Momentum Indicators, the STOCH, MACD and the ADX DI and see what each is actually indicating:
If we take a look at the Stochastic Indicator (STOCH), The %K Line (Blue Line) is indicating that momentum is upwards at the moment. The %K Line (Blue Line) is still relatively low and has a lot of room to move up before breaking into the Overbought Zone above 80 on this 6d timeframe. Note that at the moment the %K Line (Blue Line) is above its %D Line (Orange Line).
If we look at the Moving Average Convergence Divergence (MACD) we can see that the MACD Line (Blue Line) is still under its (Signal Line). We need the MACD Line (Blue Line) to cross back above the Signal Line (Orange Line) as this will be a BUY SIGNAL for this indicator on this 6d timeframe. Not that the MACD Line (Blue Line) is still above the 0.0 Base Line in the Positive Zone.
If we look at the Average Directional Index (ADX DI) we can see that Negative Momentum has dropped with the -DI (Red Line) at 21.72 and Positive Momentum has risen with the +DI (Green Line) at 17.55. Note that the trend strength has lost a bit of strength with the ADX (Orange Line) dropping to 21.67 and it is still below its 9 Period EMA (Black Line) which is at 23.61. We need the ADX (Orange Line) to stay above the 20 Threshold (Dashed Black Line) and we need the +DI (Green Line) to cross back above the -DI (Red Line) on this 6d timeframe for any LONGTERM recovery to become sustainable and real.
Note that all of these indicators can be used and applied in whatever trading timeframe you are in.
So what does all this mean. Simply put…. BTC needs to CLOSE above the Dashed Resistance Line.
If you are waiting for full Bullish confirmation on this longterm 6d timeframe, then be on the lookout for when BTC manages to CLOSE a 6d Candle ABOVE the Dashed Resistance Line invalidating the H&S Pattern.
After that, we need BTC to break back above and more importantly CLOSE above the Bollinger Bands Middle Band Basis and then the LSMA on this 6d timeframe. Also be on the lookout for any successful re-test of a previous resistance as support.
Note that there is always a possibility that if BTC cannot break above and more importantly CLOSE above the Dashed Resistance Line, then it may still invalidate the H&S pattern by ranging sideways within a range for a prolonged period of time.
I hope this is helpful with your Trading and Hodl-ing.
Notes:
LSMA = Black Squiggly Line on chart
Bollinger Bands = Yellow Bands on chart
VPFR POC = Short Horizontal Red Dotted Line on chart
VPVR POC = Long Horizontal Red Dotted Line on chart
Support Areas = Black Horizontal Lines with Yellow Shading on chart
H&S Pattern = You know where that is ;-)
ノート
BTC has failed to invalidate the Head and Shoulders pattern it is in.BTC is below its Bollinger Bands Middle Band Basis 20 Period SMA for the 1d timeframe.
BTC is below its Least Squares Moving Average (LSMA) on the 1d timeframe. Failure to close this daily candle back ABOVE this level will be a sell signal on this 1d timeframe for this indicator.
BTC is testing the previous Descending Trend-line. A daily close below this trend-line will be a good indication that BTC will drop more.
If BTC drops below the neckline of the H&S pattern, then it may potentially drop all the way to the $31,037 - $28,622 support area.
If we look at the Moving Average Convergence Divergence (MACD) on the 1d timeframe, we can see that the MACD Line (Blue Line) is pointing downwards. If the MACD Line (Blue Line) crosses back UNDER the Signal Line (Orange Line) then that will be a further sell signal on the 1d timeframe.
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