The trader who accurately called the crypto market crash of 2021 says that Bitcoin’s price action is suggesting that a sustainable rally back to its all-time highs could be underway. Pseudonymous analyst Dave the Wave tells his 143,000 followers on the social media platform X that a new push to BTC’s current all-time high is […]
The post Trader Who Called 2021 Crypto Collapse Says Sustainable Bitcoin Explosion to All-Time High Technically in the Cards appeared first on The Daily Hodl.
A widely followed crypto analyst says that Bitcoin (BTC) is entering an “explosive” phase as the king crypto’s long-term metrics reverse course. In a new thread, pseudonymous crypto strategist TechDev tells his 420,200 followers on the social media platform X that one signal comes around every 3-3.5 years which points to “several months” of growth […]
The post Bitcoin Now Entering ‘Explosive’ Phase As Several Long Term Indicators Flip Bullish for BTC: Crypto Analyst appeared first on The Daily Hodl.
A combination of RSI, Bollinger Bands and MACD indicators can help investors confirm winning trades.
Cryptocurrency trading has evolved from the perception of simply being a game of chance to a strategic process. Successful traders rely on a combination of technical analysis, specific indicators and metrics to find trades with a high probability of profit.
Before explaining the three technical analysis strategies that can help confirm a winning trade, let’s first define the key terms:
The three indicators for crypto trading examined here are:
The key distinction lies in the strategy used to apply what these indicators point to in the market. Below are some best practices on how to use them.
The relative strength index (RSI) measures momentum — whether an asset is overbought or oversold. It does that by comparing the closing price with the asset’s 50-day moving average.
If the current price of an asset is within 10% of its 50-day moving average and has been trending upward for at least two days, the RSI reading is considered to be above 70, which qualifies as overbought; on the other hand, an RSI reading under 30 is thought to be oversold.
A strong upward RSI momentum tends to point to an impending rally.
Look specifically for this type of RSI divergence: two lows, where the first low is higher than the next low, followed by an RSI where a lower low is followed by a higher low. Such a divergence signifies a potential change in momentum, meaning that a sizable upside could be happening soon.
Bollinger Bands can be used to determine an asset's relative high and low price over a set period by using a common statistics metric known as standard deviation.
By plotting bands two deviations above and two deviations below a moving average, typically 20 days, traders can use historical data to compare it to the current price.
Try using Bollinger Bands to identify breakout price action when an asset’s price moves outside of the upper or lower bands. Prices near the extremes of these bands can be another good confirmation of a winning trade.
The moving average convergence/divergence (MACD) is a trend-following momentum indicator. The MACD line shows the relationship between two exponential moving averages (EMAs) — the difference between the 12-day EMA and the 26-day EMA.
Finally and most importantly, there is the signal line — a 9-day EMA of the MACD line. With the MACD, traders watch the MACD line and the signal line to see if and when they cross over.
When the MACD line crosses above the signal line, it is a bullish indicator that informs traders to consider buying the asset, as this signals a green candle could be coming.
Conversely, when the MACD line crosses below the signal line, it is a bearish indicator that informs traders to consider selling or shorting the asset. Historically, this leads to a drop in asset value.
Cointelegraph Markets Pro’s VORTECS™ Score is a quant-style indicator providing a “snapshot” comparison between current and past market conditions for a given crypto asset.
Its artificial intelligence-driven backtesting engine performs real-time analysis on a fixed set of quantitative factors to produce a numeric score that predicts when certain assets may be due an ascension in price: a higher VORTECS™ Score means that current market conditions are bullish, while a lower score is bearish.
Many Cointelegraph Markets Pro traders use a certain value of the VORTECS™ Score as a trigger for an entry. Many traders use a value of 75 and over, as 75 is the value at which the VORTECS™ line lights up green on the Cointelegraph Markets Pro platform.
However, there is a potential obstacle here: While the VORTECS™ Score offers institutional-grade insight into potential asset movements, its predictability can be vastly improved by pairing it with confirmation from the indicators discussed above.
This principle is inherent to trading rather than the VORTECS™ Score — the more arguments that support a trade idea, the more likely it is to be a winning trade.
For Cointelegraph Markets Pro traders who consider a VORTECS™ Score of 75 as a potential entry trigger, here’s how one can use the indicators above to confirm trade opportunities:
1. Using MACD as confirmation of a VORTECS™ Score trigger on ETH/USD.
On Jan. 10, 2021, the VORTECS™ Score on ETH/USD reached 81, triggering an entry setup. An inspection of the price action on the chart shows the trigger was preceded by a MACD fast line crossing over the signal line, a bullish indicator.
By using the MACD as a confirmation tool, astute Cointelegraph Markets Pro traders could’ve used the VORTECS™ Score trigger to capitalize on what was the start of the 2021 bull run for Ether (ETH).
2. Using RSI as confirmation of a VORTECS™ Score trigger on DOT/USD.
On Sept. 21, 2021, the VORTECS™ Score on DOT/USD reached 75, triggering an entry setup. An inspection of the price action shows that DOT/USD had just displayed a bullish RSI divergence signal:
DOT/USD had set lower lows (indicated by the slanted blue horizontal line on the price chart), while the RSI had set higher lows (indicated by the slanted blue horizontal line on the RSI chart).
By using the RSI as a confirmation tool, astute Cointelegraph Markets Pro traders could’ve used the VORTECS™ Score trigger to capitalize on a near 100% move for Polkadot (DOT) in two months.
3. Using Bollinger Bands as confirmation of a VORTECS™ Score trigger on DOT/USD.
Alternatively, traders using Bollinger Bands could’ve also used the indicator as confirmation for the VORTECS™ Score trigger on Sept. 21, 2021.
DOT’s price chart shows it dipped below the lower boundary of the Bollinger Bands on the same day the VORTECS™ Score was triggered, providing immediate bullish confirmation for the trade.
Cointelegraph’s Markets Pro provides traders easy access to institutional-grade tools like VORTECS™ Score triggers and traditional technical analysis. Paired together, these can be the building blocks of creating high-quality, high-probability trades.
See how Cointelegraph Markets Pro delivers market-moving data before this information becomes public knowledge.
Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risk including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial adviser before making financial decisions.
All ROIs quoted are accurate as of February 14, 2023…
As the end of 2022 approaches, a great number of bitcoin proponents are questioning whether or not the bottom is in as far as the official end of the crypto winter is concerned. The current bitcoin bear run just entered the longest bottom formation since the 2013-2015 bitcoin bear market. Moreover, analysts note that most […]
A closely tracked crypto strategist who continues to build his following with timely Bitcoin (BTC) calls says the leading digital asset could be gearing up for a significant rally. Crypto analyst Kevin Svenson tells his 110,200 Twitter followers that he’s looking at Bitcoin’s moving average convergence divergence (MACD) indicator on the three-day chart which suggests […]
The post Bitcoin Rally in Sight As BTC Flashes ‘Textbook’ Bullish Reversal Pattern, According to Top Crypto Strategist appeared first on The Daily Hodl.
The analyst who called the May 2021 crypto market collapse says there’s now a case to be made for Bitcoin (BTC) to rally its way to the $135,000 level. The closely followed pseudonymous analyst known as Dave the Wave tells his 96,000 Twitter followers that based on one theory, BTC could top out roughly 229% […]
The post Analyst Who Called May 2021 Crypto Collapse Says Case for $135,000 Bitcoin in Play appeared first on The Daily Hodl.
MACD is green for the first time since Bitcoin's all-time highs, but a correction is the "most obvious" first step, one trader says.
Bitcoin (BTC) kept traders guessing later on Aug. 18 as one forecast said that a $40,000 dip would be the “most obvious” next move.
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it ranged around the $45,000 mark on Wednesday, with no clear direction on lower timeframes.
A dip to $44,200 earlier on the day reversed upwards, but the pattern for the pair remained a cycle of lower highs on the hourly chart.
Therefore, Cointelegraph contributor Michaël van de Poppe concluded, a higher low construction marking a corrective phase could appear “quite quickly.”
“The most obvious case for the markets right now is that we’re going to have that corrective move somewhere towards the region of $39,000-$42,000,” he said in his latest YouTube update.
Van de Poppe added that the line in the sand for bulls was around $37,000, this marking the last higher low construction supporting Bitcoin in its current trading zone.
A “crucial breaker” to the upside, he subsequently said, was the $45,600 area, which at the time of writing was just several hundred dollars away.
Zooming out, and context provided bulls with some much-needed respite thanks to one key indicator flashing “buy.”
Related: 3 ways this Bitcoin bull run is different than late 2020
That came in the form of the weekly moving average convergence/ divergence (MACD) tool, which as of Aug. 8 had flashed green for the first time since Bitcoin was at its all-time highs of $64,500 in April.
MACD is a classic interpreting method for charting an asset’s overall trajectory. The last time such a green phase began was in early Q4 2020, corresponding with the springboard for the latest bull run to get going.
As popular Twitter commentator BTC Archive noted last week, a similar green event in 2019 led to considerable price appreciation.
The MACD indicator hints at a potential bullish crossover as Bitcoin’s price retests $40,000 as support.
A crossover between two Bitcoin (BTC) moving averages that appeared before the 2020 price boom is hinting at making a return in 2021, just as the flagship cryptocurrency eyes a bullish breakout from its current $30,000–$40,000 trading range.
The indicators in focus are the MACD Line and Signal Line. MACD is an acronym for Moving Average Convergence Divergence, and a MACD Line represents the difference between the 12- and 26-period moving averages. Meanwhile, a Signal Line is a nine-period moving average.
Plotting the MACD Line and Signal Line together forms the so-called MACD Indicator, which allows traders to predict future price trends. For example, when the MACD Line (a faster-moving average) closes below the Signal Line (a slower moving average), it typically reflects a bearish trend underway. Conversely, the trend switches to bullish when the MACD Line closes above the Signal Line.
The difference between the two moving averages makes a Histogram. If the faster-moving average moves away from the slower moving average, it indicates an MACD Divergence. Similarly, when the faster-moving average gets closer to the slower one, the crossover is called an MACD Convergence.
In 2020, Bitcoin prices reacted accurately to the MACD crossovers. The chart below illustrates the said correlation.
The recent bearish crossovers between the MACD Line and the Signal Line have led to declines. Similarly, bullish crossovers have led to massive spikes. The Histogram indicator showed the strength of both upside and downside moves based on the difference between MACD and Signal Lines.
Now, Histogram is recovering back to zero with the two lines looking at a potential MACD Convergence. The same fractal appeared last in March 2020. That followed a massive Bitcoin price rally from $3,858 to circa $65,000.
Preston Pysh, the founder of the Pylon Holding Company — an equity investment firm — expected the MACD fractal déjà vu. The analyst tweeted:
The weekly BTC MACD is looking spicy. pic.twitter.com/6TvdV13yNc
— Preston Pysh (@PrestonPysh) August 5, 2021
Additionally, in a note published in July, Katie Stockton, founder and managing partner of Fairlead Strategies, wrote that Bitcoin’s “intermediate-term momentum” was improving thanks to the MACD Histogram.
But spot markets have largely ignored long-term upside outlooks for Bitcoin as the asset struggles repeatedly to break above $40,000. Its previous attempts to extend its upside momentum beyond the said level have met extremely high selling pressure.
Meanwhile, on a brighter note, a similarly strong buying sentiment near $30,000 has capped Bitcoin prices from pursuing deeper downtrends. As a result, equally assertive bulls and bears have trapped Bitcoin in the $30,000–$40,000 price range.
Related: Bitcoin bulls overtake the $40K barrier ahead of Friday’s $625M options expiry
Pankaj Balani, CEO of Delta Exchange, expects a bullish breakout move in the Bitcoin market should it manage to hold above $40,000 for a week.
“On a conclusive breakout of the $40K level, BTC could challenge the $48K level,” the executive said.
“On the downside, traders will keenly monitor the $36K level. On breakdown below $36K, BTC can quickly move to $28K - $32K range.”
Bitcoin was trading at $40,723 at publishing time.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
