BTC Market Analysis

31 thg 7, 2018

Some people believe looking at the weekly chart for Bitcoin gives you bad information when working with indicators due to its limited data range (9yrs). While the early days of bitcoin did see some extreme volatility, its normal volatility - which is still higher than traditional markets - has stayed within a reasonable range for the past 5-6 years. So I am comfortable using indicators on the weekly to gain information that can help me on the lower time-frames. The weekly volatility is still far too great to use the time-frame for actually placing orders on futures, or swaps. It can be useful though for finding likely changes in the market trend and structure.

It is also possible to look for Japanese Candle Patterns on the weekly, though they are traditionally used as a trading device on the daily candles. Tip: Look for candle patterns only shortly before the close of the current candle

When analyzing trend on a higher time frame it is important to remember there are 3 types of markets and three levels of trend.
There are Primary, Secondary, and Short term trends
And the market can be in three different types of trends Bullish, Bearish, and Sideways.

Weekly:
Primary trend: Bullish (this takes into account several years of Price Action)
Secondary: Bearish (has been since the 5/20MA cross and continues to be so until we have a recross + a higher high in the price action above 10k)
Short term: Bullish (my own strategy will only remain bullish short term if we stay above the 5MA - staying above he 20MA is even better)

As a new trader a simple strategy combined with strong risk management will outperform nearly any attempt at day trading, so it is best to consider mainly higher time-frame charts. An Ichimoku strategy or simple MA strategy is easy to follow and gives you most of the information you need. Both are lagging indicators though, so you will still have times where it is necessary to stop out at a loss. Learn to take small losses and collect big wins. And I do not find Ichimoku very useful on the weekly. 1hr-daily Ichimoku works well for me.

The weekly 5/20 MA has price closing a weekly candle above the 20 for the first time since February and under very different market conditions too. The 5MA is still below the 20, but is also below price and should act as a support now. If price can stay above the MAs and allow them to cross we could see several more weeks of bullish action. Keep in mind, secondary trend reversals on the weekly scale do not often take place all at once, several months of sideways action and several crosses back and forth of the 5/20MA is a likely scenario - and "Sideways action" on the weekly can be between $5500 - 10k. Bearish trends often slow and round out or move sideways before they reverse where bullish trends end more dramatically.

I have the Linear chart attached, but if you look at this same area on the log chart the Primary Bullish trend becomes more obvious.

MACD: Showing a current Buy signal on both oscillators and histogram.


sRSI: Previous buy signal with strong follow up.


RSI: Broke its downtrend, may be retesting, but can still bleed down forming a new downtrend.


OBV: shows the primary bullish trend with symmetrical triangle still consolidating.


On the weekly time frame the only indicator I would use as a possible entry/exit would involve the 5/20MA but in reality, the weekly is useful for helping determine a bias to trade not entries. Based on the information above, I would have a bullish bias short term (unless price breaks below the 5MA), and a bearish bias overall below 10k. It is still necessary to look at the daily and 4hr-12hr to get a better picture of what price is doing short term to find decent entries/exits.