📊BTC and S&P in the channel! Will the history repeat?
Hi friends! How can you identify the future price movements? For this purpose, technical analysis uses patterns: head and shoulders, triangles, wedges. Let's use the S&P 500 price movement pattern in the 2019 channel for Bitcoin in 2022.
✅If you are new to trading, it is important to learn how to identify the trend. A trend is the direction of price movement up or down (uptrend, downtrend) or price consolidation.
1️⃣Why is it important to know the trend direction? When the trend is going up, you have a better chance of making a successful long, because the price is constantly going up. If the trend is down, the chance of making a successful short is much higher, and longs become unprofitable. For a beginner it is easier to understand, but I will talk about advanced trading techniques in the following ideas.
When the price is in a channel, it's a consolidation. Even though price is making higher highs or higher lows, which determines the trend, but price remains in a channel. The first exits of the price outside the channel happen only to collect the liquidity as we see in the examples.
📊S&P 500. A 2017-2019 channel in the $2,500-$2,900 range.
📊Bitcoin. Channel 2021-2022 in the $30-67k range.
2️⃣What do these two channels have in common? Collecting liquidity to sell above the channel and collecting liquidity to buy below the channel.
🔶What is collecting liquidity to sell? It's a manipulation where the price breaks a level up (in our case, the upper boundary of the channel) and long traders who trade the breakout open their longs and the big player opens his shorts. That is, the big player sells his cryptocurrency reserves at the best possible price.
🔶What is collecting liquidity to buy? It is manipulation, when the price breaks the channel down and the short traders start opening their trades and the big player buys cryptocurrency from them and the price goes up. This is how the whale buys the cryptocurrency at the best price.
3️⃣Is this happening now? We will know after some time, but these two patterns are very similar to each other and probably Bitcoin price will repeat a similar movement.
🚩Why does the consolidation confuse the traders? Because there is no clear trend. A big player can accumulate a position in the middle of a consolidation channel and make several manipulations, which is exhausting for beginners.
Consolidation is very exhausting for a beginner. It is not as easy to make money as during a uptrend, when you can buy almost any cryptocurrency and it will rise in value. Consolidation makes newbies be anxious and when the price breaks the lower boundary of the channel the most impatient ones leave the market. But it`s just the beginning of the uptrend!
✅But you are patient, aren't you?
💻Friends, press the "like"👍 button, write comments and share with your friends - it will be the best THANK YOU.
P.S. Personally, I open an entry if the price shows it according to my strategy.
Always do your analysis before making a trade.
✅If you are new to trading, it is important to learn how to identify the trend. A trend is the direction of price movement up or down (uptrend, downtrend) or price consolidation.
1️⃣Why is it important to know the trend direction? When the trend is going up, you have a better chance of making a successful long, because the price is constantly going up. If the trend is down, the chance of making a successful short is much higher, and longs become unprofitable. For a beginner it is easier to understand, but I will talk about advanced trading techniques in the following ideas.
When the price is in a channel, it's a consolidation. Even though price is making higher highs or higher lows, which determines the trend, but price remains in a channel. The first exits of the price outside the channel happen only to collect the liquidity as we see in the examples.
📊S&P 500. A 2017-2019 channel in the $2,500-$2,900 range.
📊Bitcoin. Channel 2021-2022 in the $30-67k range.
2️⃣What do these two channels have in common? Collecting liquidity to sell above the channel and collecting liquidity to buy below the channel.
🔶What is collecting liquidity to sell? It's a manipulation where the price breaks a level up (in our case, the upper boundary of the channel) and long traders who trade the breakout open their longs and the big player opens his shorts. That is, the big player sells his cryptocurrency reserves at the best possible price.
🔶What is collecting liquidity to buy? It is manipulation, when the price breaks the channel down and the short traders start opening their trades and the big player buys cryptocurrency from them and the price goes up. This is how the whale buys the cryptocurrency at the best price.
3️⃣Is this happening now? We will know after some time, but these two patterns are very similar to each other and probably Bitcoin price will repeat a similar movement.
🚩Why does the consolidation confuse the traders? Because there is no clear trend. A big player can accumulate a position in the middle of a consolidation channel and make several manipulations, which is exhausting for beginners.
Consolidation is very exhausting for a beginner. It is not as easy to make money as during a uptrend, when you can buy almost any cryptocurrency and it will rise in value. Consolidation makes newbies be anxious and when the price breaks the lower boundary of the channel the most impatient ones leave the market. But it`s just the beginning of the uptrend!
✅But you are patient, aren't you?
💻Friends, press the "like"👍 button, write comments and share with your friends - it will be the best THANK YOU.
P.S. Personally, I open an entry if the price shows it according to my strategy.
Always do your analysis before making a trade.
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