Regularly find technical analyzes of the price of Bitcoin (BTC) and other emblematic cryptocurrencies such as Ethereum (ETH). But also videos to introduce you to certain technical indicators, tips or more fundamental approaches. All this with the objective of remaining clear and accessible to allow you to learn the basics of trading. And to benefit from in-depth analyzes carried out by experienced traders.
Full video of this Coin Trading analysis at the end of the article.
This new technical analysis of the cryptocurrency market will focus exclusively on the Bitcoin situation. And more specifically on the Hash Ribbons indicator that a lot of people are talking about right now. Because it has just issued a buy signal, in the form of a blue dot. But what is the relevance of this information, delivered in daily time units?
Bitcoin – What is the Hash Ribbons indicator?
The Hash Ribbons indicator has already been the subject of a full analysis video some time ago. This is to explain how it is constructed and what exactly it is used for. But more precisely: should we follow the signals it delivers? All this embellished with the code that allows it to be integrated into the tools of the TradingView platform. And finally, the possibility of obtaining the famous blue dots supposed to identify the best periods to buy Bitcoin.
And the question is not whether it works or not, but how it was built. Because the Hash Ribbons makes it possible to obtain signals positioned for the purchase, but not for the sale. Which can quickly become a problem if used exclusively. Especially since it only works in daily time units and only for BTC. With at most, one or two purchase transactions identified each year. Which is absolutely not enough in the context of a trading strategy, or even in the context of a long-term investor position.
Hash Ribbons – Optimized on the past
Moreover, the Hash Ribbons is an indicator built on the past. With a moving average of the hashrate over 30 and 60 days embellished with many filters to try to avoid false signals. But without using known time units like weekly or 14 days. Which doesn’t mean it shouldn’t be used at all. But it must imperatively be associated with other indicators or other strategieswhile remaining very suspicious.
Moreover, in the current state of the Bitcoin price, why issue a buy signal at $21,000 when it was at $18,000 just a few weeks ago. And this just after a strong bearish candle recorded on August 19 on the BTC. Because in this type of configuration, the logic is more to sell or to waiting for a consolidation on the price before a new possible buy signal to take back position. Knowing that in the past, the Hash Ribbons has already issued buy signals at $40,000 whereas a few weeks earlier it was at $30,000. An obvious lack of precision within the framework of an optimized trading strategy.
Bitcoin (daily) – Uptrend Invalidation
In daily time unit, Bitcoin has very clearly just invalidated its uptrend. This follows the strong downtrend recorded on August 19th. And a price that pierced the various supports that were trying to maintain this still very fragile movement. With, first, a return below the $22,500 mark which issued a sell signal, calling into question the rebound that had just taken place on this support. And, at the same time, a very clear break in its uptrend line (green line) which had been recording higher and higher lows for some time.
A setup that causes the BTC to return to integrate its range located between the support of $21,000 and the resistance of around $24,000. And which requires not taking a position at the moment, as long as it does not come and break the latter from above. Because Bitcoin is currently much less powerful than other cryptocurrencies, as in the case of Ethereum (ETH). And there is nothing to say that it could not yet break this horizontal channel from below and continue its return to the downside. Even if it can simply consolidate for several weeks before delivering a signal.
Bitcoin (weekly) – Still in an uptrend?
In weekly time unit, other indicators allow to define a trend for Bitcoin. Like the one shown in the chart below, which is based on a simple calculation: BTC price divided by the 50 moving average = logarithmic value. And we get two distinct periods, with on one side bullish trends (in green) and on the other bearish trends (in red). All this with an application that remains quite precise when applied to the course of Bitcoin.
An indicator that points to a downtrend, which started during Bitcoin’s last high point in February 2021. And which has been continuing since, until just over a month ago. Because since the end of July, the color has gone back to green. This more precisely when the BTC broke from above the level of around $21,000. And this trend – in weekly time unit – does not seem to be called into question by the recent decline of Bitcoin in daily time unit. And if we are to believe this indicator, this return to an uptrend could last several months. While validating for good a low point already made for Bitcoin.
Do you want to invest in the cryptocurrency sector? Coin Trading and its 100% automated algorithmic trading tool are there to allow you to do this in the best possible conditions. This is to make your investment profitable and increase your chances of success, whatever the market trend.
Trading cryptocurrencies carries a high level of risk, and may not be suitable for everyone. It is recommended that you fully inform yourself of the associated risks, and only invest amounts that you can afford to lose.
The content offered on the CryptoActu.com site is solely for educational and informative purposes. They do not in any way constitute recommendations and cannot be considered as an invitation to trade financial instruments.
The CryptoActu.com site does not guarantee the results or the performance of the financial instruments presented. Consequently, we decline any responsibility in the use which can be made of this information and the consequences which can result from it.