Mar 25, 2022

7 min read

How to Read a Crypto chart if you’re a Complete Beginner? And More in This Weeks Crypto Update.

A New Analysis of Bitcoin Halving Cycle You Need to See
New ApeCoin Crypto Analysis to Help You Make Sense of the Price Action
How to Read a Crypto chart if you’re a Complete Beginner?

A New Analysis of Bitcoin Halving Cycle You Need to See

Despite the short-term market volatility, in the long-term, Bitcoin (BTC) is still on track to follow its halving cycle model. If history is a guide, each Bitcoin halving cycle can be broken down into 5 different stages that can be used to explain the long-term cyclicality of Bitcoin price.

Bitcoin Halving Cycle

In this new framework, the halving-driven cycle of Bitcoin follows a pattern that can be broken into 5 different stages as follows:

The initial acceleration phase to a new all-time high (1*).
A pullback towards the 12-month moving average where we find the first point of inflection — aka support (2*).
A bounce from the 12-month SMA (3*).
The bounce is short-lived, and Bitcoin’s price breaks below the 12-month SMA support line (4*).
Bitcoin finds a new bottom at the 48-month SMA, which takes between 6 to 12 months to resolve (5*).

Today, March 19, 2022, Bitcoin’s price has lost the support of the 12-month SMA, which indicates that we’re in the 4th stage of the new Bitcoin halving cycle. As the Bitcoin price hovers below the 12-month SMA, there is a high chance to see a retest of the 48-month SMA, which currently stands at $20,437, to mark an important cyclical milestone.

Examining each halving event can give us valuable information into the long-term cycles at play. In the long term, the next halving event will occur in 2024, when we expect the halving cycle to start again and push Bitcoin price to new all-time highs.

New ApeCoin Crypto Analysis to Help You Make Sense of the Price Action

ApeCoin (APE), one of the newest cryptocurrencies launched on the Ethereum blockchain, already ranks in the top 100 cryptos by market capitalization. However, since the APE token was only launched on March 17, we have limited historical price data to assess the market sentiment.

However, even a smaller historical price data sample can tell a story of what really happens behind the curtain.

Price Consolidation

After reaching an all-time high of $28.00 on the day it was launched, APE’s price pulled back and is now consolidating between the $16.50 — $9.50 range zone. Short-term, within this price consolidation, we can see some upside pressure.

On the daily chart, we also have the potential of developing the 3 white soldiers pattern, which calls for a continuation to the upside.

Looking forward: While the $10.00 psychological level holds the ground, the bulls have the upper hand. At the same time, a clear breakout above $16.50 can open up the door for a test of the next resistance, namely $20.00 followed by the all-time high of $28.00.

How to Read a Crypto chart if you’re a Complete Beginner?

In technical analysis, trading using the candlestick price chart is a necessary skill to learn. The candlestick chart can help us determine entries, exits, the direction and strength of the trend, reversals, and much more.

The construction of a candle is made up of four prices (open, high, low, and close), but the resulting candlestick shape can take on various forms. Price action reading can help us interpret the different shapes of the candlesticks.

There are 3 main elements that make up a candlestick:

The body of the candlestick, which is the solid part or, in other words: the rectangular portion of the candle. The real body represents the price range between the opening and closing prices.
An upper wick is attached to the top of the body. The top of the upper wick is the highest price.
A downward wick is attached to the bottom of the body. The bottom of the downward wick is the lowest price.

The two lines above and below the body are known as shadows, wicks, or hairs.

How to Interpret Candlesticks

In general, we can identify three types of candlesticks, namely:

A bullish or upward price movement over any given time frame is identified when the closing price is greater than the opening price.
Conversely, a bearish or downward price movement over any given timeframe is identified when the closing price is lower than the opening price.
Finally, neutral candlesticks are identified when the current closing price is the same (or very close to) as the opening price.

Four basic patterns to help you get started

Engulfing Bearish

The Engulfing Bearish is a bearish reversal pattern represented by two candles.

The second candle totally engulfs the first one and starts a downward movement.

During an uptrend or upward movement, the first candle is still increasing, however, the bears respond aggressively creating a red candle that engulfs the previous one. Represented by a long decreasing candle, the sellers take over the market and push the price down.

This pattern usually precedes to lower prices due to the higher pressure of the supply on the price. Therefore, it will signal a sell if selected in your automated strategy.

Engulfing Bullish

The Engulfing Bullish is a bullish reversal pattern represented by two candles.

The second candle totally engulfs the first one and starts an upward movement.

During a downtrend or downward movement, the first candle is decreasing, however, the bulls respond aggressively creating a green candle that engulfs the previous one. Represented by a long increasing candle, the buyers take over the market and push the price up.

This pattern usually precedes higher prices due to the higher pressure of the supply on the price. Therefore, it will signal a buy if selected in your automated strategy..

Morning Doji Star

The Morning Doji Star is a bullish reversal pattern represented by three candles.

During a downtrend, the first candle is a long decreasing candle, followed by a Doji closing below the previous low. The third candle is a long increasing candle closing above the midpoint of the first candle.

During a downtrend, the indecision pattern, Doji, appears. This means that the current trend is losing strength, and the next candle confirms it. The third one initiates a bullish movement that could reverse the price direction.

Evening Doji Star

The Evening Doji Star is a bearish reversal pattern represented by three candles.

During an uptrend, a long increasing candle is followed by a Doji. The third candle decreases, has a long body and closes below the midpoint of the first candle.

It is a very used pattern in trading, especially used to anticipate bearish moves in the chart. It is usually found during upward moves. Afterward, an indecision candle, Doji, forms at the top of the pattern and is followed by a long decreasing candle that starts a bearish move.

The Evening Doji Star pattern represents how bears and bulls fight during an upward movement, which creates a Doji. Finally, the bears take over the market with a long red candle, therefore signaling a sell.