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Bitcoin’s Bearish Ascending Triangle In Early April 2020

Bitcoins Bearish Ascending Triangle In Early April 2020
Bitcoins Bearish Ascending Triangle In Early April 2020

Bitcoin is finally creating a series of consistent movements in a pattern we can analyze and identify. The price action is shaping up into a bearish ascending triangle with greater opportunities ahead!

About Triangle Formations

Triangles are a common formation seen in the candlestick patterns of the market after significant price movements up or down. These triangle formations usually occur in areas against resistance and can take several shapes including ascending, descending, and consolidating triangles.

Bitcoin Market Triangle Formation Structures and Patterns
Corrective Wave (Horizontal) Triangles, elliottwave.net

Bitcoin’s Ascending Triangle

We can see that Bitcoin’s movements are resulting in a series of higher lows pushing against the same high. This pattern is showing the resistance at the high mark and is considered ascending since the price is “ascending” toward the high price level.

The Bearish Triangle Slant

This ascending triangle formation is also consider “bearish” because the market broken down from the higher prices around $9,121 price level, reached the low around $3,935, double bottomed around $4,359 and then consolidated upward into ascending triangle structure. Since the global trend is still downward, bearish sentiment rules the global markets.

Bitcoin Market Sentiment: Reversal or Continuation?

The Bitcoin market now has two options:

  1. Continue the bearish Bitcoin trend and break downward out of this bearish ascending triangle with enough selling volume to solidify the continuation pattern (usually a very high probability overall in ascending triangle movements within the market trend).
  2. Reverse the bearish trend by breaking upward out of the triangle with enough volume to liquidate shorts, move the market price higher (turning previous resistance into support), and forming a new bullish Bitcoin trend.
Bitcoins Bearish Ascending Triangle In Early April 2020 Movement Directions
Bitcoins Bearish Ascending Triangle In Early April 2020 Movement Directions

Next Bitcoin Trading Steps

We will be watching multiple time frame indicators to see which way the markets swing and trade accordingly.

For Bear Swings and Short Positions: Watch for price rejection from the top of the ascending triangle with volume behind it. Look for indicators trigger points like RSI lower highs with higher price action, Stoch reversals from the upward price movement, and MACD histograms and signals trending and crossing downward.

For Bull Reversal and Long Positions: Watch for price movement up through the top of the ascending triangle with volume pushing it higher. Look for indicators trigger points like RSI higher highs with higher price action, upward Stoch movement on larger time frames, and MACD strength with histograms and signals trending and crossing upward.

Bitcoins Bearish Ascending Triangle In Early April 2020 - 45min, 8 hour, 21 hour, 2 day charts
Bitcoin Charts of 45min, 8 hour, 21 hour, and 2 day

I am a simple market analyst – not a financial analyst
fortis Fortuna adiuvat – fortune favors the brave
Follow this idea on TradingView

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Global Position of Bitcoin Amidst COVID-19 Chaos and Coronavirus Panic

Global Position Chart of Bitcoin Amidst COVID19 Chaos and Coronavirus Panic
Global Position Chart of Bitcoin Amidst COVID19 Chaos and Coronavirus Panic

It has been a crazy week with a lot of volatility. We’ve been seeing 4-5% moves in Bitcoin every few hours. I hope you’ve been using your oscillators to identify the whip points and profit on the shorter time frames.

I’ve been loving this shorter time frame chart setup using 5 minute, 15 minute, 45 minute, and 120 minute time frames to scalp Bitcoin this week. I have it setup where each of the four windows are around 1/2 the range of the next largest time frame. To trade short term trends:

  • Watch lower high RSIs movements
  • Be aware of MACD signal line convergence and divergence
  • Identify Stoch tops at across the different charts
  • Trade EMA breakdown or ups across the multiple time frames
  • Learn more about setting up your own multi-screen trading system and the indicators used here: The Four Screen Trading Method
15 Minute Trading Charts of Bitcoin Amidst COVID19 Chaos and Coronavirus Panic
15 Minute Trading Charts of Bitcoin Amidst COVID19 Chaos and Coronavirus Panic

As far as global perspective for Bitcoin (BTC), we are near the bottom support of the consolidating triangle. It is worrisome that we got here so fast and there is potential to fall out of the triangle. I am waiting for the next big move down from this current dead cat bounce movement up. With COVID-19 cases climbing and the global markets tanking, I don’t think there will be much support for a rally at this point.

If “hodlers” panic and need cash flow (since unemployment is rising constantly and people need liquidity), we could see an even more powerful movement down as they liquidate their holdings. Also, the growing impact of coronavirus in the United States and in the rest of the world also leads me to believe that this situation will have a lasting impact of many months with the economic echos lasting years potentially.

So far, it appears there is no short term resolution to the coronavirus, and vaccines will take up to 12-18 months to develop leading to higher incidence rates in the near future. This could lead us to new market lows in the $3-4K range longer term until hope rises. Fill your alt bags then!

TARGET:
Target sub $5K until we hear positive news about the global coronavirus condition and market improvement.

METHOD
Short with leverage.

I am a simple market analyst – not a financial analyst
Fortis Fortuna Adiuvat – fortune favors the brave
Follow this idea on TradingView