Tri, Tri, and Tri Again

So today I will cover the other indicators and signals that flashed “BUY BTC!”  As early as two weeks ago when on April 22nd Bitcoin futures broke out of the compression triangle spanning the entire range of 2020 up until that point when we had a clear and decisive breakout to the upside. Now if you were curious what your proper action would be in this instance in order to maximize profits while taking on the least amount of risk I will go over the proper action as I will be making precise trade recommendations starting by mid – May.

I will go over what the correct action would have been in this scenario, this also works on most compression triangles so it a useful tool for ant trader to have in their playbook. First of all looking at our daily candlestick chart you can notice that there were in fact three false breakouts before we officially “broke out” which is something you must be aware of so as not to pull the trigger prematurely. On the 22nd we truly had broken out because the candle for that day met all by definition.

• The candle was green with higher highs and lows then the prior candle.
• At no point did the body or the wick dip back below the upper band.
• Most importantly it closed well above the upper trend line.

On this type of breakout typically there is approximately a 60% chance of it turning into a bull run. The key to getting the best risk reward in this type of trade is to put your protective stop right beneath the upper line of the triangle at the point (price) in which it departed from the triangle. (Write to us if you want a video showing this technique and how I would have used it then and the next occurrence). By placing your stop right below that breakout point you can rest easy even if the trade goes against you. This is because if all that energy building up that was released couldn’t take it above and beyond (after a CLEAR breakout) and falls back below that point you can be pretty certain it will continue to move lower in a moderate or major correction.

On April 21st we formed a doji and the high came in just at the 21-day M.A. the next day it would trade above it and form the first higher low as well in some time. Today marks seven consecutive higher lows.  

Another early indication of a rally came from a lagging indicator, the 100-day moving average. The 100-day M.A. was apparent resistance acting as a ceiling both on last Thursday and this Monday. Within 24 hours of surpassing the 100-day we went from approximately $7,000 all the way to almost $8,800. That’s $1,800 in 24hours. And that was just the first leg we experienced this week. This rally was sparked by a flat top ascending bottom or bull wedge that happened inside the compression of range hit its apex and flew to the moon.

Tomorrow will go over even more clues that one could have used to predict this rally and were we think prices will go in the next few weeks.