We’re gonna carry over out Bitcoin chart from yesterday and overlay our support/resistance lines and Fibonacci levels with… THE MAN ON THE CHART…
I drew him on the line chart to clear up the noise so you can see him clearly. 1. Head 2. Left shoulder ( LS ) 3. Right shoulder ( RS ) 4. Neck 5. Left leg & foot 6. Right leg ( foot has not formed yet )
BITCOIN WEEKLY LINE CHART SAT MAY 29 2021 @ 7 26 PM
Looking from the perspective of the candle chart we can see that during this week price has bounced up off the foot ( the ground ) to go up and test the neck line.
The left foot represents the ground and when the right leg falls down to that foot it represents the balance point because that is THE GROUND. When you have both feet on the ground you hit the balance point. You are in balance when you are standing on two feet… Right…? We can say that price hit the balance point but we need to wait for the close of the week, tomorrow to see if the man ends up standing on two feet.
The fact that price bounced up off the ground should be expected since, if you fall from a height, you will bounce a bit before you come to rest, and we would expect price to bounce back up to the neck line before coming to rest.
These concepts are not cherry picking. These principles are taught in my video section on, ” TRADING THE MAN ON THE CHARTS.”
BITCOIN WEEKLY CANDLE CHART SAT MAY 29 2021 @ 7 26 PM
Now, from a technical standpoint we are setup to follow and project further moves of Bitcoin from the weekly chart perspective because we have some baselines.
1. Support/resistance 2. Fibonacci 3. 3rd wave ( as mentioned yesterday ) and now we’ve overlayed those with 4. Chart Man.
At this point I will throw in a little volume analysis. Notice how large the volume bar was last week as compared to this week. That was a large selling bar, 3 times larger than the volume bar for this week.
If we were to expect price to go lower next week we would like to see greater volume this week than we did last week. Since, we do not, this tells us that selling strength is getting weaker. In this case about 3 times weaker than last week. That’s not to say that price cannot go lower. But it is saying that short sellers better beware of selling short at these levels because the orders, at this point, are not supporting a continued fall just yet…
Note: Simply because I’m doing this analysis on Bitcoin does not mean that I am suggesting you trade Bitcoin. It’s just that cryptos are all the rage for the retail trader right now and it is my intent to show that cryptos follow the same laws of motion as any other trading instrument.
For that reason I have no bias between Stocks, Bonds, commodities, Futures, Bonds, Options, Cryptos, etc… I only care that an instrument trades more than 1 million transactions per day and has some volitility.
The only real bias I have about trading instruments is cost of entry or Margin. The lower the margin cost to enter a trade the larger trades I can afford to make. The larger trades means larger profits…
Cheers and one Love, Jerry