ai16z/TetherLong
ai16z - bottom is in?
ai16z has been going through a major price correction. The price retraced to $0.91 at Fib 0.786 level (the last line of defence for the bull) and bounced up. All momentum indicators reached oversold territory and broke up the descending trendline. There are some signs of strength, however, it is still too premature to open a long position.
When the price goes down significantly and tries to recover to the upside, V shape recovery is quite rare. It usually goes through a very choppy consolidation phase and works its way through to the upside.
Once way to identify the trend reversal for me is to use a Fibonacci retracement line. When I think the price has hit the bottom, I draw a Fib from the suspected top to the suspected bottom. In this case, from $2.30 to $0.91 (Orange colored fib line in the chart). When I analyse the chart with Fib level, the first thing I pay attention to is if the price will decisively break and close above 0.236 level. When it does, it often moves up to the 0.5-0.786 zone. But I need to look for more confluences as below:
1) I need to wait for the daily stochastics (9,3,3) to reset and start to move to the upside.
2) 4H MACD lines cross, point upwards and enter the bull zone (above 0).
3) 4H Stochastics is not overbought territory. If it is, the price is likely to retrace at least one more time.
If those three conditions are met and the price also breaks above 0.236 fib level, it is likely to give me a good entry for long.
When the price goes down significantly and tries to recover to the upside, V shape recovery is quite rare. It usually goes through a very choppy consolidation phase and works its way through to the upside.
Once way to identify the trend reversal for me is to use a Fibonacci retracement line. When I think the price has hit the bottom, I draw a Fib from the suspected top to the suspected bottom. In this case, from $2.30 to $0.91 (Orange colored fib line in the chart). When I analyse the chart with Fib level, the first thing I pay attention to is if the price will decisively break and close above 0.236 level. When it does, it often moves up to the 0.5-0.786 zone. But I need to look for more confluences as below:
1) I need to wait for the daily stochastics (9,3,3) to reset and start to move to the upside.
2) 4H MACD lines cross, point upwards and enter the bull zone (above 0).
3) 4H Stochastics is not overbought territory. If it is, the price is likely to retrace at least one more time.
If those three conditions are met and the price also breaks above 0.236 fib level, it is likely to give me a good entry for long.
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