Bitcoin: Big Alarm Bells about to be rung (VSTOP, NTV and BB)
There is a lot in the chart but we can go bullet by bullet. I am using the three day intra-week setting but will look at other time frames as we dig in.
Investigation:
In 2017 there was a massive run up on BTC and at a high we had the VSTOP present bearishly and in short order the 20 period SMA was breached and the MTF VSTOP was breached and confirmed in short order and a massive bear market ensued. We see we are very close to having all three conditions met currently. We have 16 hours to close the candle and if we have flipped the VSTOP it will be another 3 days to get a black dot in the bulb and we start printing bearish MTF.
1 Week Chart
This chart is a bit wonky. The log Growth curves are used to contain the vast majority of price action and the bolded lines show a lot of significance over the years. In part, if the are breached we can expect to transverse from one to the other rather quickly and either consolidate or proceed to the baseline of the upper limit.
I altered the MACD to only show the histogram because to show the crosses on the log chart is basically impossible, so we can just focus on the histogram. The blue boxes show where the MACD crossed the signal and therefor the histogram flipped from green and positive and red and negative. But that is not the only condition for a blue box. The NVT had to transition from Red into Yellow signaling lower network value/transactions. Historically those conditions being met are devastating for BTC price. Now this chart is BLX and so it is a day behind.
Here is our current chart. The MACD is clearly red and the bearish cross of the MACD and signal is upon us. We have not closed, but there is a breach of the log growth channel of interest.
Another look at the weekly chart with the bollinger band in blue and the monthly bollinger band in green. This is simple, if we slip into the monthly bollinger band with a weekly MACD cross we are in a bear market. You can take your shorts at either the baseline of the weekly chart or at the top of the monthly Bollinger band.
Here is a similar circumstance in 2013 and 2014. We have the MACD cross and slip into the monthly BB and we have a bear market.
Also, the uptrend has been marked by falling volume and RSI going into this MACD cross
In summation
- VSTOP - A way of setting stops using the Average True Range, a measure of volatility to help chart trends. I have decided to only show the VSTOP acting as resistance to simply the chart.
- VVSTOP MTF - A multiple time frame VSTOP set to three times the default setting. In conjunction with the VSTOP it can show dynamic support and resistance, For visibility I have tweaked the charts to have the flag indicating the bullish MTF was breached show high on the chart. A black dot within a bulb occurs when the MTVSTOP is breached and then we close a handle below to confirm the break.
Investigation:
In 2017 there was a massive run up on BTC and at a high we had the VSTOP present bearishly and in short order the 20 period SMA was breached and the MTF VSTOP was breached and confirmed in short order and a massive bear market ensued. We see we are very close to having all three conditions met currently. We have 16 hours to close the candle and if we have flipped the VSTOP it will be another 3 days to get a black dot in the bulb and we start printing bearish MTF.
1 Week Chart
This chart is a bit wonky. The log Growth curves are used to contain the vast majority of price action and the bolded lines show a lot of significance over the years. In part, if the are breached we can expect to transverse from one to the other rather quickly and either consolidate or proceed to the baseline of the upper limit.
I altered the MACD to only show the histogram because to show the crosses on the log chart is basically impossible, so we can just focus on the histogram. The blue boxes show where the MACD crossed the signal and therefor the histogram flipped from green and positive and red and negative. But that is not the only condition for a blue box. The NVT had to transition from Red into Yellow signaling lower network value/transactions. Historically those conditions being met are devastating for BTC price. Now this chart is BLX and so it is a day behind.
Here is our current chart. The MACD is clearly red and the bearish cross of the MACD and signal is upon us. We have not closed, but there is a breach of the log growth channel of interest.
Another look at the weekly chart with the bollinger band in blue and the monthly bollinger band in green. This is simple, if we slip into the monthly bollinger band with a weekly MACD cross we are in a bear market. You can take your shorts at either the baseline of the weekly chart or at the top of the monthly Bollinger band.
Here is a similar circumstance in 2013 and 2014. We have the MACD cross and slip into the monthly BB and we have a bear market.
Also, the uptrend has been marked by falling volume and RSI going into this MACD cross
In summation
- 3 day VSTOP bearish
- About to convert the 3d MTF VSTOP to bearish
- Broke the 3d 20SMA
- Weekly NVT and MACD combo look like hell
- Weekly and Monthly Bollinger and MACD combo bands look like hell
- Volume and is declining with rising price very suggested of the end of an uptrend on the weekly timeframe.
Me Personally
I am tethering up what I can except what I need to maintain some shorts. I had my some very long calls reach target and was willing to deal with the normal pull backs in crypto but at this point I cannot risk the upcoming volatility if I don't think we can return to these levels in a couple months or maybe even a year. If I am wrong I miss some gains till I see more strength in the charts. Oh well.
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