After the drop below the consolidation area at 25. March the price has shown incredible strength. It didn't fall any lower than the first momentum, just a little consolidation and after that a classical Bart move.
Let's jump quickly into the current action, to be said, the price approaching one of the strongest bullish
confirmation areas which is around the current levels. From the 'dump' into the 'gold' area but this is the crypto situation: You have to be open-minded all the time and react after the market reaction.
This price level is really tricky because of the bullish
confirmation and a bearish
rejection area difference is only $20-$30.
Let's start from the breakout trade opportunity
breakout) and it will be triggered after we get a candle close inside the green area, then we have:
1. Break above the orange trendline
which has been a major down-trendline since 5. May 2018.
2. Break above the short-term counter trendline
, pulled from last higher high (HH)
3. Then we are back above the mid-term major counter trendline
4. Break above the round number $4,000
which has been recently a pretty good resistance level
5. If the daily candle gets also a close inside the green area then the price is above the 100EMA
8 & 21 have on the Daily chart
a golden cross to support that momentum, also they have a golden cross on the 4H timeframe)
6. Short-term higher highs and higher lows
are still valid and pretty clean after the dump at 24. February
7. And the last point is the overall strength
after it managed to climb upwards from the pretty nice bear setup
Those all get confirmed after the 4H (or a Daily candle) gets a close inside the green area, let's say we need a candle close above $4,040!
Bearish scenario, reversal trade opportunity
This scenario is a bit riskier and more unclear but anyways, after the downwards breakout from the major counter trendline
(blue line), the price stopped and it found a support from the 200EMA on the 4H chart which surprisingly held us and we got a bounce upwards.
Sometimes, the market is like a human, if it breaths in (as it was the downwards push on 25. March) it has to breath out also (as it does it now). Multiple great breakout trades consist: we have to have a breakout and the price usually the price makes a little pullback/throwback to retest the breakout area and it continues to the breakout direction, and so as now, we have a breakout below the counter trendline
and no the price makes a retest but to get a good trade opportunity we need a bearish candlestick pattern which will confirm that rejection from current level
and the perfect scenario would look like this:
Image because then You don't have to scroll upwards to look at which was the colored line ;)
Currently the price retest exactly those all resistance levels, short-term counter trendline (black line from HH), the round number $4,000, mid-term counter trendline (blue line) and it has to get a rejections from them and this rejection has to end with a bearish candlestick pattern ( Engulfing , Shooting Star , Evening Star etc.) AND this rejection has to end BELOW the mid-term counter trendline (blue line) and obviously below the $4,000. Only this scenario will trigger the reversal trade opportunity!
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Have a nice day,
*This information is not a recommendation to buy or sell, it is used for educational purposes only!