Currently Bitcoin is trading at $6,374 and looks to be forming a base on both the 1-week and 1-month charts. We are looking for a reversal in August and September, please look at our recent audiovisual presentations for more details.
While any single technical indicator can be important in the decision making process in trading, we at Classiarius focus on a series of technical indicators and layer them – one confirming the next – to build a convincing trade idea. This week, we are looking back at August 12 to August 19, at two-week charts, and overlaying them on long-term charts and technical indicators. Of course, we add a volume component to the list of technical indicators. Right, we are seeing a reversal of Bitcoin that could see a rally in August and September.
Implementation at reversals – adding over a 3 to 5 day period and holding for 3-months. Again, we do not give trade ideas, but do like pointing out trends and more importantly reversals followed by a trend.
Focusing on the $5,942 level in August 14, then a rally over the next two days, we turn our attention to volume. We like any rally that sees and increase in volume over a 3 to 5 day period. Most people are familiar with the general chart levels, such as 100 and 200 day moving averages but we like focusing on volumes at these inflection points. i.e. a market rallies through a key level, and for a 3 day period, volume increases by 15 percent per day. This logic underscores the saying – a high volume rally is a true rally. We see one coming this week, and next making August 14 to 25 a time of equilibrium, base formation and rally.