Bitcoin and Moving Averages
Updated
At the moment I'm using moving averages 20-50-200 and Elder's Force Index ( EFI ) and that is working really well for me in Bitcoin and other alts so I thought I would share my observations.
The 20 Weekly Moving average
As you may notice, the 20WMA is quite significant, during the previous bull market it acted as a significant support and has been the main resistance throughout the bear market. BTC is currently just over the weekly 20MA, the second time in this whole bear market! Notice also how the price dropped in the last few days to re-test it as a support and we have bounced from it. Also, the first time we went over the 20WMA was when we re-tested the weekly 50MA as a resistance and that is the only reason it had enough strength to go over the 20WMA. So overall this is very positive for BTC but we have a lot of resistance ahead.
The 50 Weekly Moving average
On April 2 we bounced strongly off the 50WMA, then unable to go above the 20WMA we fell hard through the 50WMA without a bounce. Followed by two retest on the 28th of May 23rd of July. Since then the price has not been able to go higher than the 20WMA until in the last two days.
The 200 Weekly Moving average
This moving average is very significant in other markets and in the case of BTC we have bounced two times out of this moving average. This is the first time in this bear market that BTC has done so.
If you get the GTL indicator and still in the weekly chart, you will notice the lower band channel (in light grey here) was so perfectly the support around the 6k area for at least 5 times, until the 20WMA was too strong and a lower moving average needed to be tested.
This lower band (in light grey here) will be one of the major resistances ahead. Current trajectory of BTC indicates $4500 will be the next major resistance. Currently we have a potential iH&S on the daily chart which, if confirmed, target will be around that area of $4500-$4700 which is also where the 200 daily MA will be.
It is really positive to have not witnessed a major sell off yet, if that wasn't the case, it would mean BTC is extremely weak to even attempt to go higher where these major resistances are. In my opinion, BTC will officially be in a bull market once we have gone above the weekly 50MA.
I would be cautious though as we are not clearly ahead from the yearly downtrend line (dotted purple) and it is usual to see alts getting ahead before BTC has a major sell off.
The 20 Weekly Moving average
As you may notice, the 20WMA is quite significant, during the previous bull market it acted as a significant support and has been the main resistance throughout the bear market. BTC is currently just over the weekly 20MA, the second time in this whole bear market! Notice also how the price dropped in the last few days to re-test it as a support and we have bounced from it. Also, the first time we went over the 20WMA was when we re-tested the weekly 50MA as a resistance and that is the only reason it had enough strength to go over the 20WMA. So overall this is very positive for BTC but we have a lot of resistance ahead.
The 50 Weekly Moving average
On April 2 we bounced strongly off the 50WMA, then unable to go above the 20WMA we fell hard through the 50WMA without a bounce. Followed by two retest on the 28th of May 23rd of July. Since then the price has not been able to go higher than the 20WMA until in the last two days.
The 200 Weekly Moving average
This moving average is very significant in other markets and in the case of BTC we have bounced two times out of this moving average. This is the first time in this bear market that BTC has done so.
If you get the GTL indicator and still in the weekly chart, you will notice the lower band channel (in light grey here) was so perfectly the support around the 6k area for at least 5 times, until the 20WMA was too strong and a lower moving average needed to be tested.
This lower band (in light grey here) will be one of the major resistances ahead. Current trajectory of BTC indicates $4500 will be the next major resistance. Currently we have a potential iH&S on the daily chart which, if confirmed, target will be around that area of $4500-$4700 which is also where the 200 daily MA will be.
It is really positive to have not witnessed a major sell off yet, if that wasn't the case, it would mean BTC is extremely weak to even attempt to go higher where these major resistances are. In my opinion, BTC will officially be in a bull market once we have gone above the weekly 50MA.
I would be cautious though as we are not clearly ahead from the yearly downtrend line (dotted purple) and it is usual to see alts getting ahead before BTC has a major sell off.
Note
Amazing pump! I’m glad I stayed in to brace the storm! This pump is a clear sign the bull market has officially started! The price could still retest the weekly 200MA in the coming months ahead but for now this is really positive. All exchanges have the same increase unlike what happened with Bitfinex at 6k. - We have 5 weeks in a row in the green
- A cross on the monthly MACD
- Above the 20 Weekly MA
- A clear breakout of the major resistance line
Now the résistances ahead are the light grey, red trendline and weekly 50MA
Still a lot of resistance ahead but this is a good start to calm down these arrogant bears ;)
Note
My overall plan is to hold my Bitcoin position for now, I have offloaded some of it into XRP as a collateral as I see a pullback coming for BTC in the coming days/week and XRP seems prime for some gains in the next fews weeks. If XRP achieves 10% gains in the next 3-4 days and a breakout is confirmed to the upside I might consider moving 1/3 of my bitcoin position (entry at $3150) into XRP.Note
Elder's Force Index is finally above 0 for the second time in this bear market, I disregard the first time as significant since it was when we had to retest the W50MA as resistance after the W50MA was broke as a support (21 MAy 2018). Notice this was also the only time where we went above the 20 WMA. Note
MACD on two weeks, monthly seems too laggy...Note
Mayer Multiple indicator, very useful for entry points when FUD is at max, worked for me so far...Note
This sudden $1200 upward move will leave those who are not in the market right now hesitant. Get in and risk a major drop or miss out on more upside movement. Volatility is back and trying to outsmart this market can burn you badly, particularly in the next few months we will have a lot of fighting with all this resistance ahead. The key resistance for me here is that 50WMA which I believe we will test it in the next 2-3 weeks and fall from there. This additional $500 or so upward move will bring new investors in which might witness a big bull trap. A retest of the 200WMA is essential, even at current levels that would mean a -26% drop.
Note
maybe something like this Note
More like an ascending triangle with $5600 target :) 
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