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Bitcoin has bearish monthly MACD and formations
The monthly MACD has been a concern for a while given the fact that it looks like there is a high probability that it will cross the signal line shortly. Most strictly the MACD and signal line crossing means that price has moved sideways enough that the EMAs that make up the MACD have stabilized enough for the MACD to be where it was some 21 periods ago. That is a complicated way of saying that, in this case, price was going up and now it is going sideways.
Pattern traders, obviously, look for patterns. Continuation, consolidation, or reversal on price action or indicator signals and historic responses to price action. Bitcoin price action around the monthly MACD cross has been that of massive reversal, not continued consolidation or reversal. Even the most bullish of dump that we saw during the C19 dump of 2020 had a move of some 50% in one day. That is rough if you are a forced seller.
The years of 2014 to 2015 saw a massive ABC correction that lead to the MACD crossing both the signal and zero line. 2018 had a beautiful ascending triangle. 2019 into 2020 was residual consolidation from the 2017 blow off top. All of these MACD crosses lead to loses of over 70%.
When the MACD is viewed on a normal setting and zoomed in to more recent price action we can see that the MACD cross appears inevitable. It appeared inevitable in 2019 as well but there was some chop in the price action so the histogram flickered red, green, light green and red again. I don’t think that will happen in for the next move.
The price action is to clearly within a head and shoulders on the right side of this double top for me to do anything other than take shorts or look to buy the dip. In other words, I see monthly weakness on the MACD and large scale chart formations so when I see any signs of weekly strength I will be looking for daily bearish patterns to put some margin shorts on.
My Trades
In a bear market the alts are going to move faster than bitcoin so if something looks bearish on TOKEN/USD, TOKEN/BTC, TOKEN/ETH and I have chart patterns on each I will fell confident taking a short on that. Right now I have a short on XMRUSD with a profitable stop.
XMRUSD looks like it is in a massive double top and it MACD cross already happened. It took 10 months for XMR to go from $10.71 to $516 so it can just a easily go back down in the same amount of time, or quicker, given the fact that the downside to a double top is usually a bit quicker than the upside. If, for some reason it stops at a mere $50 or $25 in that time my entry is still around $210.
I also have my eye on link for a short. Below is the HA chart, I hope to see it get a little closer to the triangle resistance and then see the HA candles get tight, turn red, and then I’ll look for a more precise entry. If the triangle breaks upward I short from higher up.
I am not going to be taking leveraged longs unless I see a real long term chart pattern and I don’t expect crazy gains to the upside until we get past whatever resistance line we end up setting. The ABC correction resistance line is a key example of what I am talking about. Lots of sideways chop after the target was reached before price action broke out of the resistance line and retested it as resistance.
Pattern traders, obviously, look for patterns. Continuation, consolidation, or reversal on price action or indicator signals and historic responses to price action. Bitcoin price action around the monthly MACD cross has been that of massive reversal, not continued consolidation or reversal. Even the most bullish of dump that we saw during the C19 dump of 2020 had a move of some 50% in one day. That is rough if you are a forced seller.
The years of 2014 to 2015 saw a massive ABC correction that lead to the MACD crossing both the signal and zero line. 2018 had a beautiful ascending triangle. 2019 into 2020 was residual consolidation from the 2017 blow off top. All of these MACD crosses lead to loses of over 70%.
When the MACD is viewed on a normal setting and zoomed in to more recent price action we can see that the MACD cross appears inevitable. It appeared inevitable in 2019 as well but there was some chop in the price action so the histogram flickered red, green, light green and red again. I don’t think that will happen in for the next move.
The price action is to clearly within a head and shoulders on the right side of this double top for me to do anything other than take shorts or look to buy the dip. In other words, I see monthly weakness on the MACD and large scale chart formations so when I see any signs of weekly strength I will be looking for daily bearish patterns to put some margin shorts on.
My Trades
In a bear market the alts are going to move faster than bitcoin so if something looks bearish on TOKEN/USD, TOKEN/BTC, TOKEN/ETH and I have chart patterns on each I will fell confident taking a short on that. Right now I have a short on XMRUSD with a profitable stop.
XMRUSD looks like it is in a massive double top and it MACD cross already happened. It took 10 months for XMR to go from $10.71 to $516 so it can just a easily go back down in the same amount of time, or quicker, given the fact that the downside to a double top is usually a bit quicker than the upside. If, for some reason it stops at a mere $50 or $25 in that time my entry is still around $210.
I also have my eye on link for a short. Below is the HA chart, I hope to see it get a little closer to the triangle resistance and then see the HA candles get tight, turn red, and then I’ll look for a more precise entry. If the triangle breaks upward I short from higher up.
I am not going to be taking leveraged longs unless I see a real long term chart pattern and I don’t expect crazy gains to the upside until we get past whatever resistance line we end up setting. The ABC correction resistance line is a key example of what I am talking about. Lots of sideways chop after the target was reached before price action broke out of the resistance line and retested it as resistance.
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