To analyzing anything from a high point of view to a lower point of view, it is called top-down analysis. In the financial market, people use timeframes as the point of view where those higher timeframe used are such as yearly, monthly, and weekly. those lower timeframes used are daily and hourly.
Today 14, may let us take a look at bitcoin performance by analyzing technically from monthly as our higher timeframe to 4 hours as our lower timeframe.
Bitcoin Monthly Timeframe
Above is the monthly time frame screenshot, after a strong 5 bullish candlesticks of previous monthly bitcoin price fail to continue and form in decision candlestick(Doji) of last month, April. Technically when you see this candlestick(Doji) formed in a higher time frame it's mean that the market rest for a while(ranging in lower time frame) before gaining more momentum to continue to its direction but if it formed around the strong supply zone it's hard to continue and it's highly to change the direction. In monthly bitcoin market is still strong bullish and the price tries to gain momentum to move higher.
Bitcoin Weekly Timeframe
In the weekly timeframe, bitcoin price touch strong demand zone around 4400+ to 4900 but fail to break it and start to reject. In technical, for those who are short-term investors you have to wait until weekly candlestick to close before making any decision. If price break that zone you do need to panic and sell immediately you have to wait until its touch the second demand zone and wait for candlestick reversal patterns to form around the zone before continuo to buying. You need to buy because monthly is still in strong bullish but if you see reversal candlestick patterns. Be patience.
Bitcoin Daily Timeframe
Many long and short-term investors use this time frame as their entry time frame because it gives more accurate signs compare to the other lower timeframe. Bitcoin daily timeframe above show price fails to break that strong daily demand zone and start to reject, its look like around that area many buying limits orders are placed that’s why price start to reject. With the confluence of fibs level 50.0 and 61.8 where price touched it is influencing more buyers to place more orders.
Bitcoin 4 Hourly Timeframe
You can call them swingers, people who hold the trade for a few days or weeks. Mostly they use H4 entry to make and close their entries. Above bitcoin H4 timeframe show price touch very strong demand zone and from multiple rejections like that pin bar(very strong reversal candlestick pattern), so for those swingers when seeing that start to make a decision for placing buying stop orders a few pips above the demand zone and stop loss below the zone.
Now you know how top-down analysis is, and for me most of the time am using supply and demand zones with the confluence of fibos level 50.0 and 61.8 to identify my entry points.
The bitcoin market is still in very strong bullish by seeing monthly and weekly time frame for my advice to you all you have to do is to find buying entry in anywhere in lower time frame daily an h4 and if you get it to kill it. But don’t forget to analyze its fundament and sentiments to get more details.
Investing in and trading financial market is very risky, please you proper risk management and invest the amount of money that you can afford.