BTC:USD 4 hour chart DAILY UPDATE (day 111)
Yesterday I was watching closely as the price of Bitcoin was being squeezed in between the 12 and 26 period EMA’s on the 4 hour chart. It is common to see the price consolidate on top of the shorter term EMA and below the longer term EMA. That is essentially what Bollinger Bands are illustrating when they tighten.
Usually a bullish crossover will follow and we will get a nice pump in the price. In a bull market this can be a very reliable entry signal. However, we are deep in the trenches of a bear market and that is when those signals are often nothing more than a trap. With this much bearish momentum a false signal/peakthrough is very likely.
That is when the crossovers occur and buyers get trapped. In that scenario we would see the moving averages quickly cross back over into a bearish posture and strong resistance from the price where the crossover occurred.
We still have not retested the 12 period EMA on the daily chart and that is what I’ve been waiting for as an indication that we have returned to equilibrium after being oversold on the 6/10.
Yesterday I lined out three possible trades. Option number 2 was to open a short after falling below $6,300. If not in a position today then that still looks like the best bet. If you went with option number 3 and sold the LTC:BTC bear flag then you should already be in the money. The other option was to wait for the bounce to take us to $6,950 and that is still an option for the traders who are more patient. If I wasn't in a position I would hesitate open a short after falling so far and would likely be waiting to sell the 12 & 26 period EMA's on the daily chart.
I am going to a wedding this afternoon and will be away from the charts for the next 24 hours. It will be a great day for me to gain perspective and create memories!
Thank you for your time! Smash the like if you found this helpful, and hit the follow so you don’t miss out on future updates!
Usually a bullish crossover will follow and we will get a nice pump in the price. In a bull market this can be a very reliable entry signal. However, we are deep in the trenches of a bear market and that is when those signals are often nothing more than a trap. With this much bearish momentum a false signal/peakthrough is very likely.
That is when the crossovers occur and buyers get trapped. In that scenario we would see the moving averages quickly cross back over into a bearish posture and strong resistance from the price where the crossover occurred.
We still have not retested the 12 period EMA on the daily chart and that is what I’ve been waiting for as an indication that we have returned to equilibrium after being oversold on the 6/10.
Yesterday I lined out three possible trades. Option number 2 was to open a short after falling below $6,300. If not in a position today then that still looks like the best bet. If you went with option number 3 and sold the LTC:BTC bear flag then you should already be in the money. The other option was to wait for the bounce to take us to $6,950 and that is still an option for the traders who are more patient. If I wasn't in a position I would hesitate open a short after falling so far and would likely be waiting to sell the 12 & 26 period EMA's on the daily chart.
I am going to a wedding this afternoon and will be away from the charts for the next 24 hours. It will be a great day for me to gain perspective and create memories!
Thank you for your time! Smash the like if you found this helpful, and hit the follow so you don’t miss out on future updates!
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