Welcome to this weekly series from the TradeRoom. My name is Dave and I’m the founder of The Crypto Den, an Australian-based crypto trading and education community aiming to give you the knowledge to take your trading game to the next level.
Crypto Market Outlook
Well I’m back on the charts after two weeks with Covid (not fun!) and straightaway we can see BTC doing exactly what I was concerned about in my last analysis article. She’s broken out to the upside but failed to hold above that very important level of support.
The current price action could simply be painting a retest before continuing up, or we could be seeing a really big bear flag forming. My vote is for the latter. The bear flag price objective is usually the length of the “flag pole”, which would take the BTC price below US$20,000.
The rising price and lowering volume after a 50% market dump is indicative of a bear flag, in my opinion.
So what are we waiting for and how do we trade it? Well, as a price action trader I’m looking for key levels to either hold or break. If US$40,000 fails to hold and we create a lower low below US$37,000, I’d be feeling confident in shorts. If US$40,000 holds as support and we see some great bullish candlestick analysis in the region, I’ll scale into longs.
Again, my bias at this moment is bearish, as it has been since the end of last year. We are back below the daily 200 EMA and 100 EMA. I sure would love to buy more BTC sub-US$20,000!
This Week’s Trades
With a bearish bias, I’m looking for coins that have had recent pumps into key levels which could be setting up for shorts.
KNC/USDT
One I’m watching is KNC. It’s had some nice bullish PA up to its previous ATH exactly a year ago. It’s currently painting a big exhaustion wick on the daily and showing a decent bearish divergence on the 4H chart, all at key resistance.
JST/USDT
Watching JST for shorts at the moment, and we can see on the daily some buyer exhaustion on a lower high and with low volume. I’m inclined to short this back to US$0.06. Still 12 hours for daily close, so worth watching in my opinion.
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