There's something interesting to notice. Everytime we're having a BTC bounce towards a LOWER HIGH, people all of a sudden become euphoric & bullish, claiming the bear market is over.
There is no reason to be bullish at all. Old supports are turned into new resistances. Right now, BTC is doing nothing but confirming a new resistance around 7.400$ - 7.500$, which used to be a key support level.
Elliot Wave count indicates that we are moving within WAVE 5, heading towards 5.500$. Why 5.500$? Because it has been confirmed multiple times as a key support level.
In addition to that, we got a bearish divergence on the 4H Chart, nothing happy about that.
Voulume is decreasing.
I'm using the current bounce to add new short positions.
Have a nice day & happy trading!
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Was wrong with the bearish divergence. Should be fixed now:
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Played out as expected. Hope you didn't fomo into this sucker's rally. New Idea coming soon.
That would be a bullish divergence, although I do agree. No reason to be bullish for longer than a day until they start to accumulate.
ShaheenFahmy
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@crypto_kiddie, Thanks for the feedback, mixed that up. This one is a bearish divergence though, isn't it?
crypto_kiddie
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@ShaheenFahmy, Anytime the RSI is on an incline, but the price is lower then the divergence is bullish. Anytime the RSI is on a decline, but the price is higher then the divergence is bearish. Essentially what that says is, the strength of the coin at this price is greater than when the coin price was previously greater than or equal to the current price and the probability of testing higher prices is greater. A bearish divergence would mean the opposite, the coin at its current strength is lower than when the price was previously equal or lesser than the current price (like inflation) and the probability that this price can maintain it's value or increase is lower.
Technically, I don't believe you would be able to make a valid comparison in this example anyways. The length used on your RSI indicator is 14. Meaning you can only accurately compare strength between the current candle and the 13 candles prior. If you wanted to make a comparison further back you would need to modify the length or view it at a different time scale where the two comparison points fall within the length used.
ShaheenFahmy
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@crypto_kiddie, Thanks for the input. Anyways, higher high on the oscillator and lower high on the chart is a hidden bearish divergence, take a look here:
Hey, thanks for finding and sharing this! You're definitely correct when it comes to the geometry of it, but I'm not sure that the timeframe is correct for accurate comparison. I've marked what I see in this attached chart.
You can see there is a regular bullish div. from 2 to 3 (green) and 2 to 5 (purple). A hidden bearish div. from 1 to 4 (red) and a small hidden bearish div from 4 to 6 (orange) and no divergences from 6 to 7 (yellow). But I don't believe you can compare 1 to 7 and accurately call it a hidden bearish divergence because of the length you have the oscillator set to (14). I believe that data is too far in the past and you'd need to confirm it using a greater timeframe or change the length of the oscillator.
ShaheenFahmy
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@crypto_kiddie, Thanks for the message!
Are there certain RSI Settings you can recommend?
SammyNoden
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@ShaheenFahmy, The price action and oscillators show both a regular bullish divergence and a hidden bearish divergence, so I guess the question is which divergence wins?
ShaheenFahmy
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@SammyNoden, Well, looks like the bearish divergence has won :D