BTC - A study of the trend. 06/09/2021
This quick study is about trend, momentum & volatility at the current price. There are similarities to the current & previous price action and indicator values shown on the left hand side of the chart.
Left hand side:
We see a sine-wave like accumulation then distribution followed by a strong rally. Alongside price, you see RSI peeling off from 50 around 9th Nov 20 to confirm bullish momentum and the volatility (BBWP expansion) also increases upon approaching the previous LH (1st Sep 20). We also see BBWP start to increase on 12th Nov 20. 9 days later we saw a close above the August high.
Right hand side:
Currently, we see the same sine-wave like accum. and dist., with price trending upwards, RSI already heavily trending bullish (somewhat warped increase due to the large 1D candle on 26th July 21) and the BBWP beginning to increase as we approach the previous LH (10th May 21). To view this as potential continuation, the ideal scenario would be ranging with BBWP increasing, or a move up to previous LH and ATH again with BBWP increasing. Volume profile (VPVR) shows heavy activity at 56.5k, a resistance in line with my previous Wyckoff study idea. I believe that would be the area where we would see either a definitive rejection, or a strong break through to the highs and beyond - much like on 20th Oct 20.
Clearing the ATH could lead to a blow-off top like move as we saw from October last year (420%), although in the few months prior it spent plenty of time ranging. This current mini-cycle seems to be of extended duration, but that is logical factoring in the larger price. We have also had a much larger drop than of the previous example, more likely shaking out a lot more players this time, especially as they see much larger profits disappearing - after all, a -50% drop isn't exactly a "small dip" and we did see capitulation signal on the hash ribbons indicator. Many of these players would be waiting to enter on a breakout setup from ATH.
This idea is based on the fear/greed market cycle:
Left hand side:
We see a sine-wave like accumulation then distribution followed by a strong rally. Alongside price, you see RSI peeling off from 50 around 9th Nov 20 to confirm bullish momentum and the volatility (BBWP expansion) also increases upon approaching the previous LH (1st Sep 20). We also see BBWP start to increase on 12th Nov 20. 9 days later we saw a close above the August high.
Right hand side:
Currently, we see the same sine-wave like accum. and dist., with price trending upwards, RSI already heavily trending bullish (somewhat warped increase due to the large 1D candle on 26th July 21) and the BBWP beginning to increase as we approach the previous LH (10th May 21). To view this as potential continuation, the ideal scenario would be ranging with BBWP increasing, or a move up to previous LH and ATH again with BBWP increasing. Volume profile (VPVR) shows heavy activity at 56.5k, a resistance in line with my previous Wyckoff study idea. I believe that would be the area where we would see either a definitive rejection, or a strong break through to the highs and beyond - much like on 20th Oct 20.
Clearing the ATH could lead to a blow-off top like move as we saw from October last year (420%), although in the few months prior it spent plenty of time ranging. This current mini-cycle seems to be of extended duration, but that is logical factoring in the larger price. We have also had a much larger drop than of the previous example, more likely shaking out a lot more players this time, especially as they see much larger profits disappearing - after all, a -50% drop isn't exactly a "small dip" and we did see capitulation signal on the hash ribbons indicator. Many of these players would be waiting to enter on a breakout setup from ATH.
This idea is based on the fear/greed market cycle:
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