- Short term
- Long term
As I always do when we're having a new massive change into the market, I publish now a new complete review of my analysis. The one on ETH will follow just after in the next hour.
This time I'd begin into the short term to have a look at the actual movement, and then I'll finish up with the long term to look for limitations in the movement.
4h - 240 min
So let's begin with the first view that is showing the nowadays movement. We can see that it began on early January with the price crossing its short term resistances. As it already did a few times before without significant new trend (we staid several times in range trading) I decided not to go to fast but still keep an eye on it.
But then, and here's where we can see the true power of Ichimoku indicator, it quickly crossed long term resistances to use them as strong supports. First the Tenkan W directly followed by a perfect retest, and then it was turn for SSB weekly. At the moment I'm writing that article, price is retesting this last one. Technical drawings also confirming the movement with a very nice wedge that is somehow breaking. Nothing to get afraid of, it is perfectly normal when we face a first steep ascent and the movement needs to refuel energy while testing its support before trying to climb again.
You may notice already I have a drawn a radius called "Stop loss". I'll come back to this in the conclusion of this article.
The daily graph confirms already what we saw into the hourly graph. A H&S formation brought the power for the price to climb above the cloud. It did its job to the perfection and we're now away from its influence.
We can also appreciate the steep trend line that, unlike the hourly wedge, still didn't break. And again it is really a nice picture showing how Ichimoku plays an important role into the movement with its short and long term signals.
Again the stop loss signal will be discussed in the conclusion, but keep it mind how it came to be corresponding to Ichimoku's daily signals even though I defined it using 4h chart.
Whatever people may have said during the last low numbers, I was expecting a fall back to 6'500 $. This was always clearly explained into my articles. This idea came directly from that massive triangle the weekly chart shows us. And sometime it is good to dream a little...
And what a dream if it comes to life... But for now I'll try to keep my head cold and clean and zoom in to look for palpable signs. Although let's not forget that a wedge/triangle have its full power to push the price when it breaks between 1/2 and 2/3 of its length. And this limit has been overpassed somehow by November/October 2018 (This doesn't mean it has no power at all !).
First of all, we can appreciate the famous fallback to 6'500 $ that nearly perfectly landed. But then, most important, the movement confirms it breaking its resistance and climbing directly into the cloud, allowing a new candle to completely inside it for now. Its a relief to see how easily it broke threw SSB W, a strong resistance, but we still have Tenkan W inbound along with monthly resistances.
On this TU, both previous trend lines have been over passed along with Ichimoku's supports.
For what's left of January, the job will be to close as much as possible those trend lines hoping it was only a false break down and, more importantly, closing to Ichimoku's cloud. Ichimoku will now oppose resistances on his SSB monthly (9'875.50 $), Tenkan monthly (9'571.50 $, even if this one is the easiest to break), its cloud and finally Kijun monthly (11'394.14 $).
I believe we are at the beginning of a new long term bullish trend. First signal to enter was the price crossing Tenkan W and taking support over it. Second one is the same movement with SSB W, the movement actually being built. And last position reinforcement will be also the same movement but with Kijun W/Tenkan M.
BUT I would still keep a close look on how the long term resistances will affect the price. They can still beat him down ! This is what brings us to the famous stop loss I've been talking about before. For the moment, even if I'm bullish for long term, the actual trend is still somehow short. Weekly just began to show positive signs, this doesn't define a trend. This is why I made a quick calculation using the average wicks from earlier movements.
I came to a percentage of error the price is allowed to make, according to me. This percentage has been set to 3% and helped me define the stop loss 3% under SSB 4h. And which is interesting above all is that it happened to correspond to Kijun D ! This would let me the time to rethink the movement in case of a break down, and also reentry if it was just a long term strengthening.
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