BTC how to explain false trendline breakouts
Recently BTC broke out of a longstanding trendline starting in July. BTC broke out with good volume and retested the trendline 3 times, visible on the lower timeframes. The retests confirms the validity of the trendline and the breakout. This is a classic example of a trendline breakout.
Yet on April the 16th 2018, price action broke out from a descending trendline starting at the 2018 ATH. The breakout was with volume and price retested the trendline confirming the breakout. But there was no follow through and the price was rejected by the 200 daily SMA precipitating BTC to the lows of around 3K.
Similarly, recent price action was rejected by the 200 daily SMA after a clean breakout from the midterm trendline. And it seems like the trend has turned bearish.
How to explain these false trendline breakouts? My observation is that the peaks and bottoms follow a curved channel. And it looks like price action was rejected by the curved resistance on the 21st of January in confluence with the rejection from the 200 daily SMA.
Could it be on large timeframes resistance and supports are not straight lines but curved? The curves on the chart were fitted visually, but if tradingview had a curve fitting function, we can deduce more information. I actually requested support to provide such a tool in the future for analysis of apparent resistance and support curves.
Below is prediction I made on XRP in September using curves which turned out very accurate.
Yet on April the 16th 2018, price action broke out from a descending trendline starting at the 2018 ATH. The breakout was with volume and price retested the trendline confirming the breakout. But there was no follow through and the price was rejected by the 200 daily SMA precipitating BTC to the lows of around 3K.
Similarly, recent price action was rejected by the 200 daily SMA after a clean breakout from the midterm trendline. And it seems like the trend has turned bearish.
How to explain these false trendline breakouts? My observation is that the peaks and bottoms follow a curved channel. And it looks like price action was rejected by the curved resistance on the 21st of January in confluence with the rejection from the 200 daily SMA.
Could it be on large timeframes resistance and supports are not straight lines but curved? The curves on the chart were fitted visually, but if tradingview had a curve fitting function, we can deduce more information. I actually requested support to provide such a tool in the future for analysis of apparent resistance and support curves.
Below is prediction I made on XRP in September using curves which turned out very accurate.
Comment:
This is a better example of how curved resistances and support work. XRP prediction done in September, turned accurate.
trendline was retested 3 times.