BTC Daily - Heikin Ashi, MA (20,50,100,200), BB, RSI & MACD
Overall Summary:
Overall I am bearish.
Bitcoin is trading in the $3600 to $4200 range during the last week, 81.5% down from the ATHs, with a market cap of $63 billion. The chart indicates a continuation of the current downtrend. The price is closest to the 50 MA with a trend towards the 50 MA. The volume has decreased over the last week, which is supporting the current price action. The RSI decreased in convergence with the recent price action, a bearish signal. Finally the MACD crossed below the Signal and Zero line, along with Histogram crossing below the Zero Line, in convergence with the recent price action, a bearish signal.
Detailed Summary:
This chart uses weekly Heikin Ashi Candlesticks with a customer trend bar indicator, Bollinger Bands, 4 MAs (20, 50, 100 & 200), RSI & MACD.
Heikin Ashi candlesticks are great for trend and swing trading. Heikin Ashi means ‘average’ in Japanese because these candlesticks ‘average out’ price action vs traditional candlesticks that are based on OHLC (Open High Low Close). By averaging out price action this candlestick style reduces ‘noise’ and generates a much smoother chart pattern. This is helpful for trend traders as it is easier to identify the key trend in the market and to ignore smaller price volatility. During the last week the price has ranged by $500, opening at $4050 and closing at $3600. The price has decreased over the period which is a continuation of the long term price trend. The price is closest to the 50 Moving Average and during this period it has trended below the 50 Moving Average. The 20/50/100/200 Moving Average is currently acting as resistance while the 20/50/100/200 Moving Average is acting as support. The key Support and Resistance areas are $3309 and $3686. I forecast that price will increase/decrease/consolidate over the next week.
Bollinger Bands are the two blue bands that ‘wrap’ around the security’s price. The top and bottom are two standard deviations away from the Moving Average. If the market becomes more volatile, the bands widen and vice versa. Historically 90% of the price action occurs with the Bollinger Bands, as the price oscillates around an equilibrium. There it helps us identify where the price is in the oscillating cycle so that we can identify entry/exit points and major price changes (on the 10% chance when price breaks through the Bolling Bands). During the last week the Bollinger Bands have expanded from $350 to X550. The increase in the Bollinger Bands width was due to increased price volatility during the last week. The wicks broke through the upper band on 3 days, lower band on 5 days and stayed within the bands on 0 days. I forecast that Bollinger Bands will increase over the next week and overall trend is bearish.
Volume is a key indicator that I use to understand past, current and possibly future price action. Unfortunately a majority of the exchange volume is fake ‘wash’ trading so it is important to rely on data from reliable exchanges like Binance and BitFinex. Volume that supports price recent action helps strengthen my belief in a specific trend. During this period volume has decreased in convergence with the recent price action. On a longer term time frame, the volume is in confluence with the long term trends. I forecast that volume will decrease and this will support a decrease of price over the next week.
The RSI is a popular momentum based oscillator that helps us identify what stage in the security’s oscillation cycle it is most likely at. So after identifying the key market trend we can then apply the RSI to forecast future moves in price action (in terms of velocity and magnitude). This indicator is useful determining entry and exit points, for trend traders like myself, it is used on longer time frames as it is much more reliable. Most of the significant price action occurs around the 30 and 70 areas and ideally what we are looking for is divergence between the price action and the RSI. During the period the RSI decreased to 35 and it is in confluence with the recent price action. It has demonstrated a bearish failure swing is when the RSI rises towards 70 (considered overbought) and then RSI drops back below drops lower than its previous low. I forecast that RSI will decrease over the next week and this indicates a decrease of price over the next week.
The MACD is a popular trend following momentum indicator that can help identify a security’s momentum, trend direction and duration. is a popular trend momentum indicator that can show us a security's overall trend. The core assumption of this indicator is that a security’s price oscillates around an equilibrium. Therefore by looking at the relationship between different MA calculations, we can identify what specific stage a security maybe of it oscillation cycle. This is why we have two lines, the first is called the MACD (26 - 12 day MA) and the second is called a Signal line (9 day MA). We also have a Histogram (MACD-Signal Line), which is the 1st thing I look at. Finally there is the Zero line, which is basically when the 26 and the 12 day are equal. The MACD , that combines several indicators, is worth watching when one or more of the following happens: crossovers (MACD/Signal/Histogram and Zero line), convergences/divergences between price and rapid changes. During this period the MACD has decreased in convergence with the recent price action. The MACD line crossed below the Signal line which was a bearish trend in convergence with the price action. The MACD crossed below the Zero line which was a bearish trend in convergence with the price action. And the MACD histogram crossed below the Zero line which was a bearish trend in convergence with the price action. I forecast that MACD will decrease over the next week and this indicates decrease of price over the next week.
References:
Heikin Ashit summary - investopedia.com/trading/heikin-ashi-better-candlestick/
Moving Average summary - investopedia.com/terms/m/movingaverage.asp
Support and Resistance summary - investopedia.com/trading/support-and-resistance-basics/
Bollinger Bands summary - investopedia.com/terms/b/bollingerbands.asp
Fake exchange volume summary - blockchaintransparency.org/
RSI summary - investopedia.com/terms/r/rsi.asp
MACD concise summary - investopedia.com/terms/m/macd.asp
Overall I am bearish.
Bitcoin is trading in the $3600 to $4200 range during the last week, 81.5% down from the ATHs, with a market cap of $63 billion. The chart indicates a continuation of the current downtrend. The price is closest to the 50 MA with a trend towards the 50 MA. The volume has decreased over the last week, which is supporting the current price action. The RSI decreased in convergence with the recent price action, a bearish signal. Finally the MACD crossed below the Signal and Zero line, along with Histogram crossing below the Zero Line, in convergence with the recent price action, a bearish signal.
Detailed Summary:
This chart uses weekly Heikin Ashi Candlesticks with a customer trend bar indicator, Bollinger Bands, 4 MAs (20, 50, 100 & 200), RSI & MACD.
Heikin Ashi candlesticks are great for trend and swing trading. Heikin Ashi means ‘average’ in Japanese because these candlesticks ‘average out’ price action vs traditional candlesticks that are based on OHLC (Open High Low Close). By averaging out price action this candlestick style reduces ‘noise’ and generates a much smoother chart pattern. This is helpful for trend traders as it is easier to identify the key trend in the market and to ignore smaller price volatility. During the last week the price has ranged by $500, opening at $4050 and closing at $3600. The price has decreased over the period which is a continuation of the long term price trend. The price is closest to the 50 Moving Average and during this period it has trended below the 50 Moving Average. The 20/50/100/200 Moving Average is currently acting as resistance while the 20/50/100/200 Moving Average is acting as support. The key Support and Resistance areas are $3309 and $3686. I forecast that price will increase/decrease/consolidate over the next week.
Bollinger Bands are the two blue bands that ‘wrap’ around the security’s price. The top and bottom are two standard deviations away from the Moving Average. If the market becomes more volatile, the bands widen and vice versa. Historically 90% of the price action occurs with the Bollinger Bands, as the price oscillates around an equilibrium. There it helps us identify where the price is in the oscillating cycle so that we can identify entry/exit points and major price changes (on the 10% chance when price breaks through the Bolling Bands). During the last week the Bollinger Bands have expanded from $350 to X550. The increase in the Bollinger Bands width was due to increased price volatility during the last week. The wicks broke through the upper band on 3 days, lower band on 5 days and stayed within the bands on 0 days. I forecast that Bollinger Bands will increase over the next week and overall trend is bearish.
Volume is a key indicator that I use to understand past, current and possibly future price action. Unfortunately a majority of the exchange volume is fake ‘wash’ trading so it is important to rely on data from reliable exchanges like Binance and BitFinex. Volume that supports price recent action helps strengthen my belief in a specific trend. During this period volume has decreased in convergence with the recent price action. On a longer term time frame, the volume is in confluence with the long term trends. I forecast that volume will decrease and this will support a decrease of price over the next week.
The RSI is a popular momentum based oscillator that helps us identify what stage in the security’s oscillation cycle it is most likely at. So after identifying the key market trend we can then apply the RSI to forecast future moves in price action (in terms of velocity and magnitude). This indicator is useful determining entry and exit points, for trend traders like myself, it is used on longer time frames as it is much more reliable. Most of the significant price action occurs around the 30 and 70 areas and ideally what we are looking for is divergence between the price action and the RSI. During the period the RSI decreased to 35 and it is in confluence with the recent price action. It has demonstrated a bearish failure swing is when the RSI rises towards 70 (considered overbought) and then RSI drops back below drops lower than its previous low. I forecast that RSI will decrease over the next week and this indicates a decrease of price over the next week.
The MACD is a popular trend following momentum indicator that can help identify a security’s momentum, trend direction and duration. is a popular trend momentum indicator that can show us a security's overall trend. The core assumption of this indicator is that a security’s price oscillates around an equilibrium. Therefore by looking at the relationship between different MA calculations, we can identify what specific stage a security maybe of it oscillation cycle. This is why we have two lines, the first is called the MACD (26 - 12 day MA) and the second is called a Signal line (9 day MA). We also have a Histogram (MACD-Signal Line), which is the 1st thing I look at. Finally there is the Zero line, which is basically when the 26 and the 12 day are equal. The MACD , that combines several indicators, is worth watching when one or more of the following happens: crossovers (MACD/Signal/Histogram and Zero line), convergences/divergences between price and rapid changes. During this period the MACD has decreased in convergence with the recent price action. The MACD line crossed below the Signal line which was a bearish trend in convergence with the price action. The MACD crossed below the Zero line which was a bearish trend in convergence with the price action. And the MACD histogram crossed below the Zero line which was a bearish trend in convergence with the price action. I forecast that MACD will decrease over the next week and this indicates decrease of price over the next week.
References:
Heikin Ashit summary - investopedia.com/trading/heikin-ashi-better-candlestick/
Moving Average summary - investopedia.com/terms/m/movingaverage.asp
Support and Resistance summary - investopedia.com/trading/support-and-resistance-basics/
Bollinger Bands summary - investopedia.com/terms/b/bollingerbands.asp
Fake exchange volume summary - blockchaintransparency.org/
RSI summary - investopedia.com/terms/r/rsi.asp
MACD concise summary - investopedia.com/terms/m/macd.asp
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