Before we take a look at Bitcoin's ascension...a little lesson. In a previous article I noted the possibility of the completion of a head and shoulders pattern as below on BTC.
From current price movements this was not the case as shown below.
Charting is not an exact science however, we have different indicators and strategies that can give us the best possibilities of winning trades.
Lets take a look at how BTC stands at the moment and one way you may have traded.
In simple terms, and as the name suggests we look to identify head and shoulders. Now the shoulders may not be exactly perfect and rarely ever are. From the chart above I have drawn in the possible head and shoulders. When you look to trade this pattern you are looking for a break below the neckline. The neckline is a line that can be drawn from the base of the left shoulder.
More aggressive traders will not wait for the break of the neckline but will enter on the descend of the top of the right shoulder placing stops just above the high of the left shoulder. Reason being is that if price was to break above the left shoulder more than likely the head and shoulders scenario is void. This being the case of our example. When trading we really need to be looking at trade possibilities that present the smallest risk possible. I find when trading myself I like to enter the trade aggressively and placing my stops as explained.
If I would of been in this particular trade I would of been stopped out and rightly so as price continued to move higher.
BTC BULL RUN???
As I write this article Bitcoin is testing previous support, now resistance at $7,320. Looks poised to break resistance and head to previous highs of $8,510 indicating a likelihood of a BTC recovery. As many crypto traders are now seriously thinking of entering again we could be looking at alot of buying pressure entering the market. If we can break above resistance and hold above we could seriously see that pop in price that we have all being looking for.
There is a lot of positive chatter out there. Could it be time to get back in? Only you can make that decision.
