Bitcoin & Cryptocurrency, Technical Outlook, Edition #181 (01/02/2022)
This is not a drill 🚨 What is coming for Bitcoin and Crypto? Find out the answers in tonight's technical analysis now 🤫
Bitcoin, Game Day is upon us.
It appears that Bitcoin edges closer and closer to trend resistance.
In cases like these, maintaining a plan that observes both sides of the market becomes even more indispensable for any risk management plan.
It is essential to consider the risks of an adverse trend reversal.
For all educational purposes, today's report will leverage the collective market expertise of the Qluster Research team to cut through the noise often associated with spotting trends.
As usual, beginning our analysis with a macro view will help identify key support and resistance levels.
If these levels break down—or are reclaimed—then technical principles suggest the possibility of attractive entry opportunities.
However, correct execution is an important caveat for practitioners to keep in mind.
Bitcoin, $BTC - Daily (D1)
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As mentioned in the chart above, the 20-day exponential moving average (D1 20 EMA, GREEN) is 'resistance'.
Bullish arguments gain support from a technical perspective should price action succeed in establishing demand above this level.
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Bitcoin, $BTC - Daily (D1)
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Extreme vigilance is key.
Once flipped, stops set below the D1 20 EMA (GREEN) may assist in sidestepping a false breakout—also affectionately known as the 'fakeout'.
Bitcoin, $BTC - Daily (D1)
The information on this website is for general information purposes only. It is not intended as legal, financial and/or investment advice and should not be construed and/or relied on as such. Before making any commitment of a legal and/or financial nature you should seek advice from a qualified and registered legal practitioner and/or financial and/or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal and/or financial product. Qluster does not recommend and/or endorse products and does not receive remuneration based upon investment and/or other decisions
Qluster analysts note that Bitcoin appears to have retraced up to 50% from all-time highs. Furthermore, demand has suffered multiple rejections from the market each time price approaches.
Whether the market perceives this as bullish or bearish, the impending breakout—or breakdown—is sure to be greeted with some degree of volatility.
Note that the market structure for $BTC and most other Altcoins has been remarkably bearish for some time now…
Bitcoin, $BTC - Daily (D1)
The information on this website is for general information purposes only. It is not intended as legal, financial and/or investment advice and should not be construed and/or relied on as such. Before making any commitment of a legal and/or financial nature you should seek advice from a qualified and registered legal practitioner and/or financial and/or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal and/or financial product. Qluster does not recommend and/or endorse products and does not receive remuneration based upon investment and/or other decisions
As price action closes in on resistance levels, practitioners must be aware of several potential scenarios that can unfold.
This is an opportune moment to recall a basic tenet of analysing charts across multiple timeframes.
Theory suggests that lower timeframes are a welcome tool used for lining up a more precise entry and exit strategy—e.g. H4, H1, 30m, 15m, etc.
Bitcoin, $BTC - 4 Hour (H4)
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First, consider the hypothetical bullish scenario mapped above.
The chart below imagines a long position at the support that idealises a target at local horizontal resistance (RED). This assessment is based on multiple bullish observable retests that have closed above and a macro $BTC also approaching near to resistance at the D1 20 EMA.
Second, upon target achievement and flipping of resistance to support, stop loss is moved to break-even. This effectively covers the position in the case of unexpected trend failure.
Bitcoin, $BTC- 1 Hour (H1)
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Setting a stop loss below the yellow uptrend will minimise your exposure should a fakeout occur—also, it so happens, one of the possible scenarios.
By order of elimination, the final scenario would be a bearish rejection.
Bitcoin, $BTC - 1 Hour (H1)
The information on this website is for general information purposes only. It is not intended as legal, financial and/or investment advice and should not be construed and/or relied on as such. Before making any commitment of a legal and/or financial nature you should seek advice from a qualified and registered legal practitioner and/or financial and/or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal and/or financial product. Qluster does not recommend and/or endorse products and does not receive remuneration based upon investment and/or other decisions
Bitcoin, $BTC - 4 Hour (H4)
The information on this website is for general information purposes only. It is not intended as legal, financial and/or investment advice and should not be construed and/or relied on as such. Before making any commitment of a legal and/or financial nature you should seek advice from a qualified and registered legal practitioner and/or financial and/or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal and/or financial product. Qluster does not recommend and/or endorse products and does not receive remuneration based upon investment and/or other decisions
Q’s Conclusion
Short selling has left many broke or sidelined after the US Federal Reserve showed the world how to print, and we mean increasing the US money supply by 65%.
Above: Snapshot of historical US Money Supply from Trading Economics
It's a simple practice. Invert the chart if you must.
The key to shorting is risk management. Stop-loss placement is vital in avoiding liquidation.
Bitcoin, $BTC - 1 Hour (H1)
The information on this website is for general information purposes only. It is not intended as legal, financial and/or investment advice and should not be construed and/or relied on as such. Before making any commitment of a legal and/or financial nature you should seek advice from a qualified and registered legal practitioner and/or financial and/or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal and/or financial product. Qluster does not recommend and/or endorse products and does not receive remuneration based upon investment and/or other decisions
Referring to the bearish 4 Hour $BTC chart above, some local horizontal resistance (RED) holds steadfast. Notice that each attempt to flip the zone has been greeted with a lower high (LH), supporting the bearish argument.
After the bearish market structure unfolds, a stop loss has been placed slightly above local resistance to avoid liquidation.
This stop loss is then moved to break even (entry) if the downtrend line (YELLOW) holds—or a demand shock event occurs, i.e. a strong positive news announcement.
See you again for the next update.
- q
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The information on this website is for general information purposes only. It is not intended as legal, financial and/or investment advice and should not be construed and/or relied on as such. Before making any commitment of a legal and/or financial nature you should seek advice from a qualified and registered legal practitioner and/or financial and/or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal and/or financial product. Qluster does not recommend and/or endorse products and does not receive remuneration based upon investment and/or other decisions
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