A long term perspective to help with shorter term trades
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The monthly chart has signaled a resumption of the previous massive monthly uptrend that took BTC/USD from $5 to over $1000.
The ADX (the blue line on the DMI), which is a measurement of trend strength or momentum, is the main indicator I'm concentrating on with this post.
Currently the ADX has switched back into rising mode which shows trend strength increasing in the upward direction. After taking a couple month pause in the first trend leg up the trend is likely to resume shortly, as in by the end of February.
This new uptrend comes after a long period of ranging between $300 and $200 or about 1900 CNY to 1300 CNY. After long periods of sideways great trends are likely to form after a breakout of the rang occurs, which currently we broke out to the upside while the ADX confirms we are indeed back in an uptrend on the same breakout bar.
I strongly advise people stick to searching for long only bias trades on the smaller time frames, because there is a significant upside bias on the monthly chart.
There is a slight possibility this could turn into a fakeout, which then leads to a real downtrend, but I find that to be highly unlikely after spending so many months going sideways.
Keep in mind the all time high of $1100 or 7500 CNY had the highest momentum of the entire uptrend. For those who look for divergences in momentum, we have yet to see any in the BTC monthly uptrends. The RSI not included on this chart shows this very clearly. From experience, trends normally get pretty close the previous highs before failing completely so I'd expect this trend to get us close to the all time high if not higher.
The ATR indicator I included is a modified ATR that shows a percentage based ATR along with standard deviation bands that identify extreme increases or decreases in volatility. In this case volatility is on the low side still within what would be considered a normal range.
I also included the MACD which is self explanatory bullish with an accelerating histogram as well as an above 0, rising momentum MACD line.
Good luck in the years to come guys, but I honestly think looking for short trades would be better done a year or so out from a trend perspective. I'd either wait for a massive move up beyond all reason and/or a clear sign of a trend reversal before attempting any shorts.
Finally there can be lots of volatility inside the monthly bars, so concentrate on the smaller time frames for your trades. I would only use the monthly chart as a guide for planning.
The ADX (the blue line on the DMI), which is a measurement of trend strength or momentum, is the main indicator I'm concentrating on with this post.
Currently the ADX has switched back into rising mode which shows trend strength increasing in the upward direction. After taking a couple month pause in the first trend leg up the trend is likely to resume shortly, as in by the end of February.
This new uptrend comes after a long period of ranging between $300 and $200 or about 1900 CNY to 1300 CNY. After long periods of sideways great trends are likely to form after a breakout of the rang occurs, which currently we broke out to the upside while the ADX confirms we are indeed back in an uptrend on the same breakout bar.
I strongly advise people stick to searching for long only bias trades on the smaller time frames, because there is a significant upside bias on the monthly chart.
There is a slight possibility this could turn into a fakeout, which then leads to a real downtrend, but I find that to be highly unlikely after spending so many months going sideways.
Keep in mind the all time high of $1100 or 7500 CNY had the highest momentum of the entire uptrend. For those who look for divergences in momentum, we have yet to see any in the BTC monthly uptrends. The RSI not included on this chart shows this very clearly. From experience, trends normally get pretty close the previous highs before failing completely so I'd expect this trend to get us close to the all time high if not higher.
The ATR indicator I included is a modified ATR that shows a percentage based ATR along with standard deviation bands that identify extreme increases or decreases in volatility. In this case volatility is on the low side still within what would be considered a normal range.
I also included the MACD which is self explanatory bullish with an accelerating histogram as well as an above 0, rising momentum MACD line.
Good luck in the years to come guys, but I honestly think looking for short trades would be better done a year or so out from a trend perspective. I'd either wait for a massive move up beyond all reason and/or a clear sign of a trend reversal before attempting any shorts.
Finally there can be lots of volatility inside the monthly bars, so concentrate on the smaller time frames for your trades. I would only use the monthly chart as a guide for planning.
Nota
If this nice breakout on the lower timeframes gets above 2630 CNY or $394 USD, I would consider this the bullish move I was looking to buy.Nota
The move up today has put the monthly ADX back into rising mode. The DI+ and ADX are both below 40 which signals an attempt at $1,000 is very likely - probably in the next 3 months. Make sure your trades continue to be long biased, because if you get caught in a bad short it could be catastrophic.
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