BITCOIN Multi-Timeframe Analysis + Trade Signals

Jun 25, 2019
BITCOIN Multi-Timeframe Analysis + Trade Signals

Hi, everyone!

It seems like the sideways trend on BTC/USD is coming to an end, and the price is reversing upwards.

A 20-day EMA (on a daily chart ) is growing - a positive signal for Bitcoin. EMA stands for an exponentially smoothed moving average - the trend indicator smoothing out short-term price fluctuations and giving the trader a clearer image of market trend. A 3-day EMA (fast EMA ) is growing as well, which generates a strong buy signal.

Importantly, Bitcoin is trading above its moving average, which means that the trend is gaining momentum upwards.
The primary technical indicator I’m using in the trading strategy for Bitcoin is Bollinger Bands (shown on the chart). This indicator consists of a moving average plus a higher line representing the moving average plus two standard deviations from average price and a lower line that is a moving average minus two standard deviations.

We can see from the chart that over the past week the range between the two outer lines (or bands) has been narrowing, meaning the volatility of Bitcoin price has been decreasing.
The buy signal, which I’m seeing, arises from a significant breakout above the upper boundary band, and this breakout implies that a new upwards trend is likely to persist for some time. This is a positive signal, indicating that the next bullish breakout may occur soon.

Stochastic oscillator (14,3,3), plotted on a daily timeframe , is increasing and hasn’t approached an overbought range yet, which sends a buy signal as well.

This chart pattern generates a valid trade signal:
- Buy at $12,000
- Take-profit at $15,500
- Stop-loss at $10,600
- Forecasted P&L: $30,000 per 1 lot with 10x leverage
- Risk/reward ratio: 1:1.6 (attractive)

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