Crypto Trading: This May be the Line in the Sand
Crypto bulls may have found their line in the sand.
After weeks of downside, coins may have just caught triple bottom support at a level where most have often rebounded. This is the point where buying has often overwhelmed selling and prices begin to move higher.
For example, if we examine a six-month chart of Bitcoin (BTC), we can clearly see the triple bottom “line in the sand” between February 2018 and June 2018. Each time the coin has fallen to this level, it has bounced.
Learn How to Spot Unique and Predictable Patterns in Cryptos
n February 2018, it bounced from $6,000 to $12,000. Then in April 2018, it again found support around $6,500, rebounding back to $10,000. In June 2018, after falling from $10,000 to less than $6,500, the coin found the same area of support.
An argument can then be made that if BTC holds triple bottom support here, it could potentially rebound again with analyst hopes for a retest of $10,000.
Then again, we don’t want to rely too heavily on a single indicator.
We need to wait for two things. One is confirmation of trend change. We want to first confirm if the break is real or not is with a change in volume. Consulting volume for confirmation of breakout is essential to ensure changes in supply and demand. If the coin begins to break higher, yet there’s not a lot of volume, we have to question the validity of the move. Without it, we don’t know if the stock has simply gotten ahead of itself or if it’s actually breaking out at all.
That’s step one.
We also want to confirm further with a look at other technical pivot points, such as the Bollinger Band, MACD, Fast Stochastic, and Relative Strength (RSI). For example, as we can see in this chart, each time BTC tested $6,000, the move higher was preceded by a touch of the lower Bollinger Band, with RSI at its 70-line, with MACD below zero, and with Fast Stochastic below its 20-line.
We can see a similar line in the sane with Ethereum Classic (ETC).
Notice what happened at $14.38 dating back to early February 2018. The coin bounced. In February 2018, it bounced from $14.38 to $40. In April 2018, it bounced from $14.38 to just above $25. In June 2018, it’s right back to $14,38.
Also notice what has happened each time ETC fell to $14.38 at its lower Bollinger Band. RSI touched the 70-line. MACD pulled back far too much, far too soon. Fast Stochastic fell under its 20-line. We also got confirmation from volume at each oversold point.
In June 2018 following a good deal of crypto bearishness, we found at least a dozen opportunities just like BTC and ETC that have the same line in the sand set up.
If you can spot them, and know how to trade them, you could do quite well.
Bonus Report: There are several patterns that can pintpoint the likely price movement of cryptos. Click Here to get the full report on how to spot these patterns.