My Secret Chart For When To Buy Bitcoin In A Bullish Trend
Hello traders!
I hope the markets have been treating you well and you’ve been crushing all of your trades.
In today’s post, I want to give away a chart that has made me a lot of money dating back to 2016.
I also want to go in to detail on how I use the RSI to determine when to get in and out of BTC USD by determining bearish and bullish control as well as the transition zones.
The key to understanding this chart is that it is truly about waiting for the proper set-ups and not rushing in and over trading.
For this chart, we are looking at the weekly price action.
Not the 3 day, daily, 4 hour, hourly or… god for bid, the 1 minute chart.
This is like a birds eye view of the market where we pick our spots to enter in to positions where our thesis is quickly invalidated.
First, let me explain the RSI . RSI stands for relative strength index and it is a momentum oscillator that is calculated with average price closings and given a ratio from 0 to 100.
Think of 50 as the pivot zone for bullish and bearish control of the market.
In Bitcoin’s case, above 54 = Bullish and Below 44 = Bearish .
There are, of course, nuances to this general rule, but by and large, this has dictated Bitcoin price action since 2011.
Here is a zoomed in view of RSI that I had posted about a week ago to my private trading members.
This is also located at the bottom of the chart with much more detail.
This is a powerful tool because you can clearly see the bull market support levels as well as the transition zones before bitcoin shifts trends from bullish to bearish and vice versa.
Now, the other key is the 21 exponential moving average .
Since 2011, this has been the **KEY** support and resistance in both bull markets and bear markets.
Since we’ve started our rally in 2019, we have not tested this support level .
This, to me, is the ultimate place for building a long term swing position for Bitcoin’s bullish uptrend.
The current 21 EMA is sitting at the $8900-$9100 level.
We are also getting closer and closer to our 53 RSI bullish bounce zone that we have seen react heavily off of.
Our invalidation level is very clear here as we can cut our trade and exit if our RSI level doesn’t hold and a weekly closes below the 21EMA.
By waiting and building a position here, we are drastically reducing our risk because we are buying a correction in an uptrend, rather than buying IN the uptrend itself.
Now, one thing people will probably start talking about is the potential MACD flip on the weekly.
We are getting close, but it hasn’t happened yet and to be honest, you can go back and look at MACD correlation and the results aren’t really that great. I put more faith into RSI and moving averages than MACD myself.
On my next post, I’ll show you how to determine tops and potential sell points for Bitcoin in a bullish market.
If you enjoyed my post, leave a comment below with your own thoughts and give a like on the chart.
Your support is amazing and thanks for reading!
Source: jacobcanfield
