There are two potential trade setups that could develop and we can wait patiently to see if either setup gives us a good trade entry.
Scenario 1: False Breakdown at Horizontal Support
In this first scenario, we are waiting for price to hit the horizontal support @~$21800 and then bounce back up.
Confirmation criteria for entering a long position:
1. Candlestick: A breakdown candlestick (candle close below support @~$21800) followed by a reclaiming candlestick (candle close above $21800), ideally breakdown and reclaiming candlesticks are consecutive candles, but also have a few candles in between.
2. Volume: Above average volume ( volume above the average volume line) on both breakdown candle and reclaiming candle, ideally the reclaiming candle's volume is a local high
3. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (color changing from red to pink)
Ideally we get all three confirmations above for an entry, but sometimes we might only get 1 or 2 confirmations. The more confirmations, the higher the win probability.
Scenario 2: Rejection at Resistance
In the second scenario, we are waiting for price to go up to the confluent resistance zone of the 200MAs and 61.8 Fib Retracement and then fall back down. This zone is currently projected to be ~$23350, but could be slightly different once we get to that level based on price action.
Confirmation criteria for entering a short position:
1. Candlestick: A bearish candlestick pattern such as a bearish engulfing candle or a multiple candlestick breakdown (a large green candle followed by multiple red candles that eventually close below the open/low of the large green candle)
2. Volume: Above average volume on the bearish engulfing candle / on any of the multiple red candles that eventually break the green candle (ideally on the candle that breaks)
3. MACD: MACD histogram topping out (changing from dark green to light green
Ideally we get all three confirmations above for an entry, but sometimes we might only get 1 or 2 confirmations. The more confirmations, the higher the win probability.
Please follow for daily trading levels and potential trade setups on Bitcoin and Ethereum. I will be posting trade setups at about this time every day.
Scenario 1: False Breakdown at Horizontal Support
In this first scenario, we are waiting for price to hit the horizontal support @~$21800 and then bounce back up.
Confirmation criteria for entering a long position:
1. Candlestick: A breakdown candlestick (candle close below support @~$21800) followed by a reclaiming candlestick (candle close above $21800), ideally breakdown and reclaiming candlesticks are consecutive candles, but also have a few candles in between.
2. Volume: Above average volume ( volume above the average volume line) on both breakdown candle and reclaiming candle, ideally the reclaiming candle's volume is a local high
3. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (color changing from red to pink)
Ideally we get all three confirmations above for an entry, but sometimes we might only get 1 or 2 confirmations. The more confirmations, the higher the win probability.
Scenario 2: Rejection at Resistance
In the second scenario, we are waiting for price to go up to the confluent resistance zone of the 200MAs and 61.8 Fib Retracement and then fall back down. This zone is currently projected to be ~$23350, but could be slightly different once we get to that level based on price action.
Confirmation criteria for entering a short position:
1. Candlestick: A bearish candlestick pattern such as a bearish engulfing candle or a multiple candlestick breakdown (a large green candle followed by multiple red candles that eventually close below the open/low of the large green candle)
2. Volume: Above average volume on the bearish engulfing candle / on any of the multiple red candles that eventually break the green candle (ideally on the candle that breaks)
3. MACD: MACD histogram topping out (changing from dark green to light green
Ideally we get all three confirmations above for an entry, but sometimes we might only get 1 or 2 confirmations. The more confirmations, the higher the win probability.
Please follow for daily trading levels and potential trade setups on Bitcoin and Ethereum. I will be posting trade setups at about this time every day.
