Bitcoin Weekly – The bigger picture

Following Bitcoin on a daily basis is all good and well, but what about long-term? Is it possible to use trading indicators and trading tools to judge where Bitcoin may go weekly?

Let’s find out…

Updated: 17/06/20 – Scroll to bottom of the post.

When daily trading you’re using the support and resistance levels to make a profit off the shorter movements. This is all good and well but knowing an overall direction for the whole month can again make it easier to ‘manage your risk’.

No one likes to be “trapped high” and even investors like to know roughly when the price is visiting the bottom. Buy low and sell high.

On this post I am quickly going to put together a chart for you to look at. Please note; that whilst this works for me it may not be how you choose to read cryptocurrency charts.

If you do anything differently please leave a comment, I’d love to know how I can improve what I am already doing. Everyday is a school day, and as such, I am always willing to learn.

The trading tools and indicators that I am using on this post can be read about in my ‘Learn To Trade Cryptocurrency‘ section. Just click the link and have a read.

Okay, on to the charts.

Support and resistance

Firstly I try and find my major support and resistance levels. Here are the ones that I am currently using on the weekly chart.

** Click on image to expand **

Major support and resistance areas for Bitcoin on the weekly chart
Locate major weekly support and resistance. This can help identify buy and sell points.

Key: The purple lines are resistance and the light blue are the support.

Already we can start to see where Bitcoin is likely to go just by using these levels and the indicators. We can enhance this view by adding our Fibonacci levels.

Fibonacci Retracement

The first Fibs I always add are my Fibonacci Retracement lines. Remember; always drag from ‘Swing Low’ to ‘Swing High’.

The result (Green):

** Click on image to expand **

Fibonacci retracement on the weekly Bitcoin chart
Fibonacci retracement. One of the best ways to find support and resistance.

Magic – Damn, I love Fibs.

Fib Extension

Now for the downwards Fib extension, in red. This time in reverse. Drag back from the first bounce, at it’s lowest point, to the ‘High Point’.

** Click on image to expand **

Fib extension on the Bitcoin weekly chart
Fib extension lines on the weekly Bitcoin chart can show potential future areas of support and resistance.

The way I use Fibonacci Extension, as I have previously mentioned, may not be how others do. I find though that this works well, for me. These red lines now show potential areas of interest on the decline.

Trading channel

Next is to see if this is in any kind of channel, so I will set my channel top line to the very highest ‘candle wicks’ and the bottom to the lowest ones, like so:

** Click on image to expand **

Bitcoin weekly trading channel
Setting channel lines for Bitcoin can help show future price movements.

I believe when trading on the stock market they say a confirmation of a channel happens after 3 touches. That would mean I have my bottom channel line bang on where it needs to be.

The top channel line has ‘confirmed’ twice… Will there eventually be a third? Well, this is cryptocurrency and Bitcoin has a habit, in my view, of not conforming.

Elliott Waves

Last but not least Elliott Waves.

I’m still practicing with the trend of down waves but so far I’ve done alright, it is literally the reverse to a bull run.

Here on the weekly it would be like this (in yellow):

** Click on image to expand **

Bitcoin weekly - Elliott Waves
Using Elliott Waves on the weekly Bitcoin chart can help to identify a future price and direction.

Beyond point 2 is a guesstimate – No one knows where this is actually going for sure. The only positive way I’ve found for trading is using the daily. I play the moves as they happen.

Conclusion

My concerns recently with this chart and the direction of Bitcoin weekly is that it has just moved through the higher Fib retracement line, and has also passed the Fib extension level. Next support doesn’t seem to be until the fib retracement at around $7,369.

For me the likelihood of a $6,000 Bitcoin again is very real.

There is also plenty of area on the downside of the RSI and the MACD (which has just crossed) to allow this to happen.

This could all make for tricky buying conditions.

** Click on image to expand **

Bitcoin weekly indicators - RSI and MACD
Weekly Bitcoin RSI and MACD (crossed) showing downwards direction.

As a note: I never assume anything, I always expect the unexpected and use all of these charts as a “guide” only.

Stop loss

Stop loss = Essential

Boring to keep going on about a stop loss, I know. However, just wait until you have that trapped feeling and watching as the value drops.

Psychologically you will be thinking I should of sold, it won’t go any lower than here. Then as it moves lower you’ll think damn should of sold, it’ll go back up, but it doesn’t.

Sweaty palms and helplessness.

In the terms of BitMEX – Boom, gone… Liquidated.

Trade safe.


Update: 17/06/20

It’s been a fair few weeks since I last edited this post and so I thought I would go ahead and update it.

Things on the weekly have been playing out quite nicely. It seems that Bitcoin has just passed the top of the trend line that I set back early March. There was a second ping off the major resistance at $10,500.

To me it seems like this won’t hold as a high. I am confident that the Elliott Waves will play out and this is the top of wave 4.

Where we go after wave 5? I predict a lower highs for the waves ABC and maybe a third test of $10,500 on wave 1, perhaps even a possible $20,000+ break out? That would be nice but as written above it’s all guestimate. Early August for wave A? Let’s see…

** Click on image to expand **

Bitcoin Weekly Chart Update 17/06/20
Bitcoin doing what Bitcoin does best plenty of weekly volatility. Elliott Waves playing out nicely.

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