Opinions
Crypto Talk with Terence
Bitcoin (BTCUSD)
CRYPTO:BTC
RISKY
Mar 17, 2022
Stock price when the opinion was issued
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The triangle we spotted on Bitcoin was very effective and broke its resistance with a nice candlestick that made it take almost 6% in one day.
The take profit target is still located at $56,000, close to an important supply area (many sell orders pending in the order book). The price is currently operating a pull back on the resistance zone it broke recently, this is perfectly normal and occurs in about 60% of cases (Chartist analysis, by Francois Barron), this could also be a very good entry for investors who missed the low of the triangle and its breakout (we can also wait for the breakout of the last high.
Investors who took position at the low or middle of the triangle currently have a nice profit (+20-10% at the time of writing, +30-20% at the high), and can expect much more, if the pattern materializes until the end. The most sensitive (and they are right) to money management have already moved their stop loss beyond their entry point, and can no longer, regardless of future developments, lose money.
It is interesting to note the high correlation between Bitcoin and other cryptos. Indeed, since the break of the triangle on Bitcoin, the main other cryptos have all experienced interesting gains this week, including Ethereum (which also broke a triangle from above), and Solana (+60% for a week). The case of Solana is very interesting because we had two chartist figures, a triangle and a triple bottom that led to this rise of 60% in 1 week and 80% since March 11.
Although probabilistic, chartist analysis remains an extremely powerful tool to evolve with more confidence in the chaotic financial markets, no matter what the detractors say, provided of course to retain this elementary but crucial rule that is missing to 90% of investors, and allowing to extend its life (in the financial markets) on the long term: to have a perfect control of its money management.
Since January 18, 2022, Bitcoin has been oscillating within a clearly visible ascending triangle in daily units. According to empirical statistics gathered over time, traders have learned to view this chartist pattern as one with a higher probability of leading to an upward movement.
Currently, the price is sitting at the $41,100 mark, which corresponds to the support line of the triangle (analysis done on the Binance Futures BTCUSDT chart). By taking the distance between the highest and lowest points of the triangle, and using this distance as a profit target, we get a profit zone of around $56,300.
An aggressive trader can therefore place a buy with a take profit at $56,300, and a stop loss below the support line at $36,700. The more cautious trader can monitor the triangle daily, waiting for the resistance breakout at $45,000 before taking a position. Keeping in mind that charting is not an exact science (and this is the main reason to have an extremely strict money management) and that the markets are even more uncertain in this period with the Russian-Ukrainian conflict that causes daily repercussions on all markets.