Tag: forecast

Weekly Range Update

On By CryptoAdvisorIn weekly range update1 Comment

weekly range enXBT/USD weekly range.forecast $610-$800 | daily moving average is firmly bulllish and main support is at VWAP near $520 although when the market is strong usually the first positive deviation line act as main support; now at $615.

In my previous weekly range update i was thinking that XBTUSD was going to add another 50$-60$  in the current up-cycle and it happened. Right now i’m observing market behaviour around the static resistance of $680, apparently XBTUSD is going to break this resistance and skip the scenario of a substantial price correction.

Aniway in case of a strong price correction i’m looking at the $520 support as an interesting buying zone where to buy the dip.

ITALIAN VERSION OF THIS ARTICLE HERE AT BITCHANGER.COM

Long Term update: Static Resistance

On By CryptoAdvisorIn Long Term Trading5 Comments

Monthly Chart

monthly

This is a simple monthly chart since Jan.2012, important facts are:

  • Accumulation zone #2 is above previous one, #1 in the chart
  • The static resistance at $680 is also the 50% of the price swing from the all time high down to the 2015 bottom at ~$150

As i explained in past updates the midpoint or 50% it is one of the strongest and most important resistance/support level. The main trend is obviously up (at least so far) because the low around point 2 in the chart is above point 1 thus is legit to expect a new all time high if this market can break above the $680 static resistance.

Furthermore the fact that the two accumulation zones highlighted in the chart never overlap tell us that the underline long term trend is very strong and because of this i expect a new all time high in case of a strong breakout above $680.

Forecasting resistances

btcusd-mn1-simplefx-ltd

This is a template i use for long term analysis with metatrader 4 platform, first i compute a price regression with 12 or 24 bars/months with a monthly chart then i compute supports and resistances. Dotted lines represents supports/resistances using the recent volatility of XBTUSD, non-dotted lines are levels computed using twice the value of recent bitcoin volatility.

We are exactly at the resistance and this is very interesting because in 1-2 months we will see if bitcoin long term trend is still up or not.

I have taken in account the log-normal distribution of price otherwise i’d have had very bad results in computing the levels, usually it is not required but when prices movements are so high you have to. What does it mean? It’s simple, before doing any calculation first compute the natural log of the price, do your stuff and last reexponentiate the data to have back the price chart with a linear scale.
This is why i do not recommend to use standard bollinger bands with bitcoin on a long term chart, you would have bad results, sometimes with the lower bollinger band going negative! clearly unrealistic.

 

 

 

 

Weekly Range Update

On By CryptoAdvisorIn weekly range update1 Comment

BTCUSD daily chart

XBT/USD weekly range.forecast $540-$650 | daily moving average is still bulllish after the strong spike. Support is at VWAP near $480. Volatility remains high togheter with RSI oscillator now at 92.
Although support is at VWAP near $480 i think that $540 should hold in case of a retracement.

I think that XBTUSD will probably add another 50$-60$  in the current up-cycle before a substantial correction takes place.

In case of a price correction i’m looking at the $480-$540 price range as an interesting buying zone although as i said before $540 should hold.

Italian version of this article here at bitchanger.com

Intraday Update

On By CryptoAdvisorIn Intraday Update, Short Term Trading

This is bitcoin 1 hour price action chart since May 21, i labeled in the chart 3 points where the R-Squared indicator topped above the 0.8 thresold, i explained in this update how R-Square works. Yellow line is the ALMA moving average while below the price chart we have the r-squared indicator, classic stochastic oscillator and Chaikin Volatility indicator, last two with standard values. It is interesting to notice that on the bottom we have had a volatility peak, oversold stochastic oscillator, r-square above 0.8 and the price touching the lower support of my regression price channel. These are all good signs that may btcusd-h1-simplefx-ltdsignal a turnaround in the trend. As i explained in a previous update about r-square when this indicator cross the 0.8 thresold signaling a possible end of the current price swing (up or down) doesn’t necessary mean that the price will reverse and fall, as you can see in point C of the chart, why is this happening? Because if the overall trend is strong all the price corrections in an uptrend sometimes are not strong enough to push the price down therefore we have situations where the price stays flat or reduce its speed without doing a price reversal. At point B in the chart you can see that both r-squared and stochastic oscillator were signalling a reversal but XBTUSD stayed flat or sideway.

Furthermore the Chaikin volatility indicator can give you further information when to trade or not, here it indicated very well an intraday bottom (hopefully it could be also a bottom on the daily chart as i speculated in the previous update) again at point A.

Possible strategies are to buy when there is a retracement after a strong reaction, in this case wait a situation like the one at point A, wait the retracement after point B and buy at the subsequent price reaction to the upside to end your trade at point C where the R-Squared saturated above the 0.8 thresold. In this case we are talking about 2-2.5 usd profit for each btc traded, not much if you consider the high spread and fees charged by bitcoin exchanges, an old reason why i don’t trade intraday this market yet.

 

Short Term Update: VWAP test

On By CryptoAdvisorIn Short Term Trading1 Comment

image
A major drop pulled XBTUSD right above my 2 months VWAP thus for now we are not going to see a stronger up move near $500. However the market might rebounce from here as happened many times in the past after a strong correction the VWAP provided support. I think that could be smart to buy at or slightly below the VWAP between $400 and $425.

In the attached chart i replaced the RSI with a Stochastic oscillator with standard settings, moreover i added the R-Squared indicator that often is useful to understand what is going on.

R-Squared

What the hell is RSquared?:) Well R-squared is a measure of association and it measures the proportion of explained variation between the linear regression and the underlying data it is tracking. For a trader this means that the r-squared calculation identifies how much closely the linear regression indicator matches the price movement. The higher the r-squared value the greater the correlation with the trending component of price.

The length of lookback parameter (14 periods in the above chart) chosen plays a role in determining the numeric level at which r-squared assumes a positive correlation with the underlying linear regression and price movement at the statistical 95% confidence level; the shorter the r-squared length, the higher the r-squared level needed. In our case a 14 period reaches a positive correlation at the 0.27 level, while a 50-period only needs to exceed a 0.08 level.

R-squared moves on a scale from zero to one. A rising r-squared indicates strength of association with a price that is trending, while declining r-squared readings suggest a weak or weakening correlation between linear regression and price, in this case the price is simply moving sideways without the presence of a trend.

In the above chart you can see that when r-squared is stalling above 0.80 a possible top is near but this doesn’t mean the price is going to crash because another option is the price moving sideways right below a top.

A stochastic oscillator is useful as a timing tool to enter short or long when the r-squared is saturating above 0.80.

Another view of stochastic and r-squared with an intraday chart

BTCUSDH4
This is an H4 chart of XBTUSD, you can clearly see the cycles of the r-squared moving above 0.27 (0.27 because i’m using 14 periods for the indicator) and 0.80. It is clearly visibile the price going sideways when the r-squared is stalling above 0.80; now the r-squared is again approaching 0.80 signalling that the strong downspike is probably near the end togheter with the stochastic oscillator near oversold territory.
The yellow line is the ALMA moving average, other lines are a way to do a regression of the price and deviation lines to build a price channel.