BTC USDT is in a Text Book Quality Rising Wedge [In-Depth]
There are so many interesting things going on here from a technical analysis perspective. Let's break them down per section.
First of all, we cannot miss this beautiful rising wedge. A rising wedge is formed when price consolidates between upward sloping support and resistance lines. The slope of the support line has to be steeper than that of the resistance. This indicates that higher lows are being formed faster than higher highs. This is a bearish pattern, where we expect a high impact negative drop if the price breaks through the bottom support. The price has beautifully stayed within the boundaries so far, validating the rising wedge pattern.
The most interesting thing is that the way it's forming is exactly like the text books draw the pattern. If you ever wanted to understand a rising wedge, this is the most classic way of getting one! I drew the textbook example on the chart for your reference.
The second point I really want to emphasize is on psychological resistance.
Especially in crypto, way more so than legacy markets, there is a high share of humans trading. This is due to the poor liquidity still in the markets. Large corporations cannot enter crypto and trade it to make their 1 billion into 2 billion. However, amateur traders can enter the markets with their $1.000 and try to make it into $2.000. This is why it's not interesting for the big players to take their algorithms and unleash it on crypto. The relative gains might be sweet, but the absolute gains are meaningless to them.
As I broke down in my other post about human-psychology based trading you have to keep an eye on the beautiful round numbers as this is where people find their support or resistance. Exactly at the point where we expect the price to reach a higher high in the rising wedge, we find the resistance of $7.250. This to me is a big indication of confluence. I don't expect that level to break, and want to use this idea to sketch to you the bearish scenario. If the price will keep following this rising wedge, we will see a bearish breakout later.
If you want to learn more about the psychology behind trading, check out:
Follow me for consistent high quality updates, with clear explanations and charts.
Please like this post to support me.
- Trading Guru
--------------------------------------------------------------
Disclaimer!
This post does not provide financial advice. It is for educational purposes only!
About the links below:
20% Discount on Binance: Did you know that Binance introduced a new system where you can get 20% discount on your fees? Find the step-by-step guide on how to add it to your account on the website of 100eyes
Forex & Crypto Scanner: Nobody can keep track of all the pairs on all timeframes. This scanner works on Telegram and sends an automated message including a chart every time something happens to a coin. E.g. it can automatically detect areas of support and resistance, RSI Divergences, Fib Retracements, and more.
First of all, we cannot miss this beautiful rising wedge. A rising wedge is formed when price consolidates between upward sloping support and resistance lines. The slope of the support line has to be steeper than that of the resistance. This indicates that higher lows are being formed faster than higher highs. This is a bearish pattern, where we expect a high impact negative drop if the price breaks through the bottom support. The price has beautifully stayed within the boundaries so far, validating the rising wedge pattern.
The most interesting thing is that the way it's forming is exactly like the text books draw the pattern. If you ever wanted to understand a rising wedge, this is the most classic way of getting one! I drew the textbook example on the chart for your reference.
The second point I really want to emphasize is on psychological resistance.
Especially in crypto, way more so than legacy markets, there is a high share of humans trading. This is due to the poor liquidity still in the markets. Large corporations cannot enter crypto and trade it to make their 1 billion into 2 billion. However, amateur traders can enter the markets with their $1.000 and try to make it into $2.000. This is why it's not interesting for the big players to take their algorithms and unleash it on crypto. The relative gains might be sweet, but the absolute gains are meaningless to them.
As I broke down in my other post about human-psychology based trading you have to keep an eye on the beautiful round numbers as this is where people find their support or resistance. Exactly at the point where we expect the price to reach a higher high in the rising wedge, we find the resistance of $7.250. This to me is a big indication of confluence. I don't expect that level to break, and want to use this idea to sketch to you the bearish scenario. If the price will keep following this rising wedge, we will see a bearish breakout later.
If you want to learn more about the psychology behind trading, check out:
Follow me for consistent high quality updates, with clear explanations and charts.
Please like this post to support me.
- Trading Guru
--------------------------------------------------------------
Disclaimer!
This post does not provide financial advice. It is for educational purposes only!
About the links below:
20% Discount on Binance: Did you know that Binance introduced a new system where you can get 20% discount on your fees? Find the step-by-step guide on how to add it to your account on the website of 100eyes
Forex & Crypto Scanner: Nobody can keep track of all the pairs on all timeframes. This scanner works on Telegram and sends an automated message including a chart every time something happens to a coin. E.g. it can automatically detect areas of support and resistance, RSI Divergences, Fib Retracements, and more.
Thảo luận về những biến động và nói cùng nhau về thị trường giao dịch ở cộng đồng Telegram này nhé!
t.me/Vietnam100eyes
(bắt đầu từ tháng 2 - 2023)
t.me/Vietnam100eyes
(bắt đầu từ tháng 2 - 2023)
Ideas relacionadas
First of all, I forgot to look at one zone of incredibly important resistance. I was focused on the $7.250 zone because of the psychological resistance. However, I didn't look at the zone much closer to the price of $7.000. After the price hit $7000 exactly, it already started dropping. I initially anticipated this drop to start after a higher high, so I updated the chart with this new $7.000 scenario
Secondly, even though the price did not reach the upper bound of the rising wedge, it is still valid. The properties of a rising wedge still hold, and the price has been moving inbetween beautifully.
Last, but not least. Wow. I am really overwhelmed by all the responses on this idea. It even reached the second place on Tradingview for BTCUSDT. I have been trading for years, but only just been using Tradingview for two weeks now, so I feel really humbled to get this positive response from everybody.
Also, I have seen many of you have already joined the 100eyes scanner Telegram channels. This is really great, it definitely makes your life so much easier if you're trading using Technical Analysis.
Thanks everyone!