In one of my previous posts “” , I showed you how you could call the trend reversals in Bitcoin as soon as they occurred. This by relying on Heikin Ashi candle trading, which is a slightly different way of charting than regular candles.
--------------------------------------------------------------------------------------------------------------------------------------------------- Sidenote on Heikin Ashi (feel free to skip this) The difference lies in how candle sticks are calculated:
Close = (open + high + low + close) / 4 High = maximum of high, open, or close (whichever is highest) Low = minimum of low, open, or close (whichever is lowest) Open = (open of previous bar + close of previous bar) / 2
FYI: A doji candle is a commonly found pattern in a candle stick chart, characterised by being small in length - meaning a small trading range - and with an open - and close price that are virtually equal.
FYI2: A spinning top is another Japanese candle stick pattern with a short body found in the middle of two long wicks.
FYI3: Heikin Ashi candles can be found in Trading view under the candle stick section and by clicking the 4rd option; these work somewhat differently than regular candle sticks.
I showed many examples in the Bitcoin graph, so that you can apply them yourself.
In that , I showed you guys that there was a negative trend reversal in 5 on the chart back then ("2") in the new chart - see below:
Graph today:
Before reaching that point, I also showed how you could have called the bottom, in .
Anyway, your mind is probably racing now with that one single question - OK, BUT WHAT THE HECK IS HAPPENING NOW?!
Well, we have been testing this bright green resistance line a couple of times now. And this time - let's call it the third time - we want that third time to be the charm.
We are bursting into the position where the big downward trendline in yellow, and the bright green resistance are crossing, and all the Heikin Ashi candles are still tell us that we can keep going. We are seeing NO DOJI WHATSOEVER, for now. AND, if we have a break-out, we are also crushing that inverse head & shoulders neckline resistance. That would be a major bullish sign - with a target at $15,6K more or less.
We have RSI and MACD going in our favour.
Note that we are not in the clear YET, we need a break-through. Otherwise we can fall back to $10,5K or even lower. So keep your eyes open on that breach and on any dojis coming to ruin the party. Also, volume is trending a bit downward, we need volume!
PS: if we zoom in on the chart to the 1-hourly, then we see, even on that level, that the chart is still making green candles towards that zone of truth. It will be very exciting to see how this pans out.
Please do not consider this as any kind of formal investment advice - DYOR and best of luck in your trades and investments. Feel free to follow on Twitter for the freshest updates.
Komen
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There we have a doji - that is not good news. Keep an eye on the subsequent price movement, if a red candle follows, and we see the short term support broken - we're out. For the moment, we are still in that upward trend channel though.
Komen
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4-hour chart:
1-hour:
Komen
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Heikin Ashi doji followed by support breach. We have support now on the next white line as you can see. But momentum is relatively bearish, MACD and RSI aren't promising. This turned fast :-)
Komen
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Additional tip: a good thing to do - albeit a bit more advanced - is applying the Stochastic Momentum Index (SMI) and the Chande Momentum Oscillator (CMO)
If you combine that with Heikin Ashi analysis, you have a strong set-up to get in & out at trend reversals and extremes. Have a look at how this looks like for Bitcoin (while also looking at the candle sticks)
Komen
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Note that as you can see, on the four-hourly we are closing in on a buy signal in the SMI. That means that short term we will see some green candles first. The curve must be upward for that!
Komen
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On the daily, we see that "death cross" in the SMI, we'll see the result of the red candles soon in a first red candle on the daily.
Komen
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And as you can see, applying these two indicators/oscillators with your graph, sets you up in strong position to get in and out of trades.
Komen
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Likely short term buy moment on the 4-hourly. We are seeing a Heikin-Ashi forming for the trend reversal + the SMI and the ChandeMo agree with the set-up.
MACD needs a little more time, but the SMI is a bit more accurate I think:
RSI shows oversoldness & an upward trend reversal.
Note that on the daily, we are not there yet - but in the short term we can expect a quick reversal. We are actually heading the exact opposite way - so watch out on trading those green candle sticks
Komen
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Quick 5 cents just before bed time:
We have a spinning top hinting trend reversal. We also see some first upward movement on the shorter time frame candle sticks (e.g. 4-hourly) The SMI is about to cross bullishly + cross will be in the green zone. MACD blue seems to be heading into a cross where it will come out above the red line. We are seeing strong support on the green Fibonacci line (61,8 retracement level).
To illustrate the strong support on a shorter timeframe level:
Komen
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First green confirmed!
Komen
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So I hope you were listening!
(recap of the comment above: We have a spinning top hinting trend reversal. We also see some first upward movement on the shorter time frame candle sticks (e.g. 4-hourly) The SMI is about to cross bullishly + cross will be in the green zone. MACD blue seems to be heading into a cross where it will come out above the red line. We are seeing strong support on the green Fibonacci line (61,8 retracement level). --->BUY )
Thanks for the analysis Cryptastic. Looks like we're going down again... Once again the 11.7k resistance has proven too strong.
A_Cryptastic_Mind
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@RubenB89, pleasure
Indiobear
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ok where we at Boss?
revmarketing
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Another great chart analysis @A_Cryptastic_Mind. Thank you for all your effort good Sir. May i ask of a trend/chart analysis which has helped you or some martial to learn your style of chart analysis please?
A_Cryptastic_Mind
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@revmarketing, I guess it is a mixture of experience and solid theoretic background (I studied Finance - MSc- and a postgraduate in advanced portfolio allocation). But really, if you have a look at some of the stuff I use (e.g. MACD, etc), but also SMI etc, you can find A LOT of information on that just lying around here on the internet. For a full-on MACD tutorial I can refer you to our website (see my bio) and there under tutorials you have a movie on it. You can really learn a lot by just browsing the internet, following other tradingview authors, and by experimenting/ applying all the things yourself. In terms of books and more concrete resources, I'll make a quick list when I have the time and post it on your website - and if I don't forget ( :-) ) i'll forward it to you as well!
karimahmed
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Nice
Etc Bro :(
A_Cryptastic_Mind
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@karimahmed, haha - i can't do all the charts in the world my man - but i'll try ;-)