Hi Traders! Bitcoin short term forecast follow up and update is here. On January 5th I shared this “Technical Analysis – Bitcoin Short Term Forecast” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
Looking at the H1 chart, we could see that the price which was moving lower has created a bullish divergence that has formed between the first low that has formed at 45641 and the second low that has formed at 45517 based on the MACD indicator which we may consider as evidence of bullish pressure. Also, based on the Parabolic Sar we could see that the dots are below the price which we may consider as yet another evidence of bullish pressure. Until the H4 key support zone holds my short term view remains bullish here. If the price moves higher and breaks above the last high at 47500 with momentum creating a bullish convergence based on the MACD indicator, we may then consider it as a validation for the bullish view. We may then expect short term bullish moves to happen here after possible pullbacks.
Bitcoin H1(1 Hour) Chart Current Scenario
In Bitcoin, my short term view was bullish and I mentioned that “if the price moves higher and breaks above the last high at 47500 with momentum creating a bullish convergence based on the MACD indicator, we may then consider it as a validation for the bullish view”. The validation for the bullish view which is a valid breakout above the high at 47500 didn’t happen here. Alternatively the price moved lower and we got a valid breakout below the strong support zone, thus invalidating this bullish view. My current view on Bitcoin is neutral.
Even though we had facts supporting the bullish view here, the validation for the bullish view which is a valid breakout above the high at 47500 didn’t happen here. Alternatively, the price moved lower and broke below the strong support zone, which is a contradictory sign opposing the bullish view. Then as you can see in the image above how the price moved lower further after that, thus invalidating this bullish view. This is why we should always trade based on the facts and hints provided by the market and take the right actions according to that.
So traders, when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This Bitcoin forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
