Bitcoin: Imminent Drop May Be in Play; Short Probability (May 1)

1 May 2020

X Force Global Analysis:

We would like to introduce to everyone a very simple indicator that has time after time been proven to show overbought and oversold situations - the "Envelope" indicator. Simply put, envelopes are technical indicators that are typically plotted over a price chart with upper and lower bounds. The most common example of an envelope is a moving average envelope, which is created using two moving averages that define upper and lower price range levels. Envelopes are commonly used to help traders and investors identify extreme overbought and oversold conditions as well as trading ranges. An envelope, in technical analysis, refers to trend lines plotted both above and below the current price. An envelope's upper and lower bands are typically generated by a simple moving average and a pre-determined distance above and below the moving average—but can be created using any number of other techniques. Many traders react to a sell signal when price reaches or crosses the upper band and a buy signal when price reaches or crosses the lower band of an envelope channel.

As we can see above, our charts show that when Bitcoin was trading above the envelope range, it has always retraced by at least 30%+. Furthermore, after our black swan event with Bitcoin dropping more than 50%, it has reacted to a 150% bounce when Bitcoin was trading BELOW the envelope average.

We are interested as to how Bitcoin will be trading just before the halving event. We believe based on the probabilities, that Bitcoin may have the halving event already priced in and be ready for another drop based on the envelope.

Trade Safe.