Methodical Trading - Volume 9 - "Sweet Victory!"
Bitcoin, Ethereum, Litecoin, Altcoins, and a Gem.
Since our last update Bitcoin has continued it’s impressive move upwards towards All-Time-Highs. After a few days of consolidation, price appears to be aiming for $20,000 after popping above $19,000.
Ethereum continues the massive rally, both against the BTC and the USD pair. Although funding has gone extremely positive, it looks like there is still gas in the tank for price to continue moving upwards.
Litecoin has struggled around the $88 region for several days now. It’s likely that money will flow into Litecoin along with other Altcoins on a greater scale if BTC can consolidate. However, it would best to wait for LTC/BTC to print a stronger buy signal first.
Talking Points
Bitcoin Near ATH!
Ethereum Playing Catch Up
Litecoin To Follow?
Altcoin Setups
Gem Notice!
Bitcoin Near ATH!
On the Weekly chart, Bitcoin has smashed every level through and through. There is quite literally nothing but air after breaking $20,000. Anything beyond that region will begin Bitcoin’s journey into another price discovery mode.
On the Daily, price has had very little opportunities for pullbacks. While the 21/26 EMA’s are typically best used in an uptrend such as this, Bitcoin has not touched these EMA’s since early October. Rather, the EMA 8 (Light Blue) has been the primary EMA to keep Bitcoin propped up as it grinds higher. This parabolic rally continues to accelerate at a faster pace. It is unlikely that this type of rally can continue for several weeks, caution is warranted here as price approaches $20,000. This is a due reminder and bias check that Bitcoin can still fall 20-30% and still be EXTREMELY bullish. Do not forget that IF/WHEN a correction in the market comes! This is not any sort of bearish sentiment, but rather a reminder that this bull market will not end overnight. Stay bullish and be prepared to have some Fiat ready upon the deeper correction. Pullbacks will occur and it will be your decision to buy the dip accordingly!
Zooming into the 1 hour, we can see how price has broken upwards after 4 touches of the initial diagonal resistance. There is also an argument that the pattern is an ascending triangle. Either way, the pattern has already broken towards the upside and appears to have retest in the candle afterwards highlighted in Blue. It looks like this recent move up has created a sharp pullback in Altcoins, which could give prime entries if Bitcoin begins to consolidate again.
As mentioned in the previous Volume, as long as the Weekly RSI for Bitcoin can continue to bounce off the Gray region, then the bull market is still on! Be prepared and set some alerts when this occurs. Additionally, do not forget the Hash Ribbons indicator that is currently in the process of printing another Buy signal in the coming weeks.
Ethereum Playing Catch Up
Ethereum has had a momentous ride up recently and the ETH/BTC pair is largely a part of it. With the ETH 2.0 launch on the horizon, price still looks primed for more as we move towards the end of 2020.
Price has successfully held the Gray region marked below (weekly demand) and has had a strong bounce so far. It is likely that price will be heading towards the Upper Gray box once more around 0.038 sats. So far, this is looking like a strong reversal here to the recent correction ETH/BTC has experienced since August. With Bitcoin consolidating up until the recent break of $19,000, Ethereum has been given time to catch up, along with other Altcoins being given the same chance to pop as well.
On the Daily, ETH/BTC has closed above the 100 MA (Purple). On the current candle, price has already fallen below it, but there is still over 10 hours left at the time of writing for this Daily candle to play out. If price can close back above the 100 MA, then we’d be looking at a strong Support/Resistance flip here for ETH/BTC. This would be a strong indicator that a visit to the Upper Gray Box is likely.
Zooming in on the 4 hour timeframe, ETH/BTC is rapidly approaching the 21/26 EMA’s (Brown/Orange). Price is already in the process of bouncing off a near wick on the 21 EMA. If Ethereum can hold this uptrend by bouncing off this area, then price may rocket upwards past the previous high printed a few candles ago.
ETH/USD has benefited greatly off this recent move in ETH/BTC as well. The Long setup from $400 provided in prior updates has played out perfectly and it would be wise to take some off the table here after this tremendous move up. So long as the current rally holds it’s bullish market structure, the initial Target of $785 looks good to hit in the coming days/weeks.
Taking a look at the 4 hour, price has held the 21/26 EMA’s in this uptrend and is currently resting on the EMA 8. If price action continues to accelerate similarly to Bitcoin, then I would expect the EMA 8 to continue to hold. Another pop upwards would be strong confirmation of the uptrend acceleration and can be used for future scalps.
The RSI appears to be reaching an apex soon as well. Look for a break in the RSI in combination with the EMA’s to position for the next move, whether it be a deeper pullback or faster acceleration towards the upside. The trending bearish divergence stands out significantly on this ride up. However, these divergences have less meaning in a raging bull market such as the one we are in.
Litecoin To Follow?
Litecoin has also benefitted off the recent rally across the board. Ethereum and other Altcoins continue to pop, however, the LTC/BTC chart tells a different story. This Weekly chart is still Bearish until the downtrend can be broken. So far, price has been consistently rejected from the 21/26 EMA’s and has completely failed to break upwards since last year. However, if LTC/BTC can once again get above the 21/26 EMA’s and flip them as S/R, then we could see this coin pull off a very similar move to Bitcoin and Ethereum over the past few months. Until then, this Weekly LTC/BTC chart does not warrant any strong conviction for a Long position. As soon as price breaks this downtrend and the Lower High structure, the R:R will be quite favorable in combination with the possibility of a macro bottom.
Altcoin Setups
DOGE/BTC:
One of the easiest setups to take in Altcoins at the moment is DOGE. Price is sitting near all time lows against BTC and every trip down here has been rewarded massively. It would be unwise to pass on another opportunity like this because the R:R and the likelihood that this moves higher is extremely favorable.
An entry between 16-20 satoshis is ideal. Due to the nature of DOGE’s price action, a Stop Loss below 13 would also be best. The three targets outlined on the chart are 60, 81, and 100.
UNI/USDT:
This is a smaller set up here on the 4 hour. UNI looks to be setting up a nice S/R flip as long as it holds the Gray box. An entry just above $4 along with price targets of $4.48 and $5 are the initial TP points. A Stop Loss below the Gray region around $3.82 seems best if Bitcoin ruins the party by becoming extremely volatile again.
RSR/BTC:
RSR/BTC looks primed here IF it can get above the Gray region and hold it as support. The setup outlined above is a BREAKOUT trade that I am only taking upon the successful SUPPORT/RESISTANCE FLIP of the Gray region. Simply put, price looks like it could move up significantly once this region is cleared. I will be updating this chart if the conditions of the trade are met.
Gem Notice!
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