What’s this? —> “Pitchfork” analysis of the playing field for Bitcoin’s next price levels + explanation of historic movements based on that same fork.
We can see that the pitchfork can provide us a bunch of information on the pricing evolution, resistance & support levels and so on. Top that off with a nice Fibonnacci retracement scheme and we can start explaining the movements on the graph.
For the interested: some examples are shown in the graph! Have a look and you can see it providing us a lot more information. Mid November, you can even see one candle stick testing both Fibonnacci resistance and support!
Examples for the very very interested among you:
- The lower pitchfork line shows us a strong line of support in the upward trend channel from Sept – Dec: price even falls through for a second, but the pitchfork does its work and price gets back in. - We see the forks acting as resistance in the first half of the graph, being easily broken by the price movements: Bitcoin bull on a rampage - After the top, we see them taking their support role, protecting Bitcoin from ca crazy crash. The bitcoin Bear is currently playing with the 0.382 support line. Know that the graph typically likes the 50% so if something bearish triggers downward movement, we are highly likely to hit that target. - In the mean time, we see the lower pitchfork working as support, we see that the 50% line was briefly touched upon mid December and we see interesting stuff when we combine the pitchfork with Fibonnacci… A fibonnaccious pitchfork story.
What does this mean for our trades: --> We actually have to keep very attentive to whatever happens next, it can play out either way. --> We do see a short term bullish reversal in the penultimate candle stick (the red one, where you can see the smaller part of the candle doing a “low test”, setting the tune for the next (green) upward candle. That one also shows a low test, so we could reasonably expect more upward movement first. --> Apart from that, look at the support lines in the graph, they can help you in determining whether to buy or sell going forward.
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By the way, the chart stuff above can serve as a basis for your analysis; you can also draw a second pitchfork - as this author did (see link).
However, --> use indicators such as MACD, RSI, CCI etc. to your advantage and in combination with trend lines in your analysis. --> We can also see a bearish H&S (head & shoulder) pattern around december, followed up by a reverse H&S (bullish) after which the price increases strongly again to create the head of a second H&S figure where we currently see a second shoulder. That should also put us in a more cautionary position :-)
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FYI - bullish short term reversal is happening: already up to over 14K from around 13K.
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The short term bulls have now switched camps to the bears!
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50% Fibonnacci support just touched by the red candle stick at 16/01/2018!
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(& see how the same test happened on 27/12/2017)
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*22/12
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Bitcoin moving down to exactly the Fibonnacci supports as drawn above.Yesterday it ended the day on the Fib 50% line. Today we are seeing the 61,8% level breached.
Thanks for backlinking! Pitchforks are a great tool for swing trading, but you need to do the basic price action S/R analysis work before, it's not magic ;P
Let's see what happens in Bitcoin, I think this year we are going to see a drop thanks to WallStreet boys putting away soft hands before the actual ride starts. This motherfuckers now how to trade.
A_Cryptastic_Mind
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@troneras, Hi troneras, thanks for commenting! It's as always in cryptos: exciting times :D