🚀 4h 200 EMA Clarity for Bitcoin Cautious Bears

6 Mar 2023

Hello! I am enTHUZed an educator specializing in the Strength Trading System.

🚀 BTC has now confirmed a bearish monthly double top and has potentially begun monthly consolidation. I am finding the most macro clarity on the 3-Week timeframe. Bitcoin has maintained a 3-Week downtrend since the 2021 69K all-time-highs. Most recently getting rejected by the 3-Week 21 EMA. Price has now confirmed a daily downtrend and we are now watching the weekly higher low & daily 200 EMA dynamic support level around 21.4 K. A loss of this level would confirm the first weekly downtrend since November of 2022 and bring the question of bear market lows back into the conversation. From here BTC is either going to challenge the weekly lows or print a weekly higher low and rechallenge the 25.2K highs.

We need to keep in mind the technicals have never been less relevant than over the last 12 months of trading with retail perception of fundamental news resulting in “whipsaw” bull rips & bear dips lacking 3-point trade checklist high probability trades for those that are technically inclined. “Headline” trading has dominated the market for quite some time.

On the macro: We have witnessed an unprecedented parabolic short squeeze off the lows which I have coined as a “Bull Swan Event”. In this move price Bull Ripped in an unsustainable fashion taking very little time to consolidate. It is a red flag for the bulls that price has been unable to close to monthly higher highs.

✅More likely scenario IMO: We are now “Cautious Bears” with price consolidating below the 4h 200 EMA dynamic resistance level. Price has realized the 78% Fib static support retracement level of the current swing low to swing high 12h trading range. Currently we have a weak “Bear Flaggy” bounce off the lows grinding towards the 4h 21 EMA dynamic resistance level below the 4h swing high to swing low 38% most bearish retracement level. Bearish continuation is more likely.
Less likely scenario IMO: If price breaks to weekly higher highs we are anticipating price to realize the 38% retracement of the weekly trading range & monthly 21 EMA around 28K. Keep in mind we are now cautious bears as price is printing a weak “Bear Flaggy” bounce below the 4h 200 EMA dynamic resistance level.

☑️ Personally: I am finding the most clarity on the 3W, 12h, & 4h timeframes. My current trade game plan centers on Bitcoin’s price interaction with the 4h 200 EMA. If price pushes towards the 4h 200 EMA I will be scouting bearishly divergent price discovery pivots with weak relative strength candle closing below the 4h 200 EMA for short opportunities.
I will scouting swing long opportunities if: either price bounces and flips the 4h 200 EMA from resistance back into support or the 4h BTC Bear Flag breaks bear and RSI gets oversold on the 12h or daily timeframe confluent with the 12h 200 EMA dynamic support level. Otherwise I will likely not interested in swing long opportunities.
*Please keep in mind as we get more information daily my trade game plan may change.

📍 Simple Bull Statement: BTC has to flip the 4h 200 EMA back into support to entertain the idea of BTC rechallenging the 25K highs.

📍 Simple Bear Statement: As long as the 4h 200 EMA remains dynamic resistance it is more likely price will seek further downside. Loss of the 21.4K weekly support level puts bear market lows back in the conversation.

👉 It is important to note:
1. There are a lot of Broadening Wedge style candlestick patterns on the charts which are difficult to trade. Bullish correlations between cryptocurrencies and traditional market indices are weakening.
2. Although the DXY has confirmed a daily uptrend it has yet to confirm a weekly uptrend and is currently finding resistance at the 12h 200 EMA.
3. The NAS100 & SPX500 remain in weekly uptrends and are currently seeing some nice bounces on the 12h towards 50% retracements. Bullish continuation from here increases the odds weekly higher lows are set.

*️⃣ Make your own trade decisions, I am only an educator on the Strength Trading System.