Table of Contents
Overview of BTC (Mid-term, long-term, short-term technical analysis + practical example of this week’s trading ~ gap filling ~)
Overview of BTC
This week as well, the US stock index fluctuated violently in a short period of time due to the ever-changing situation in Russia and Ukraine. Bitcoin behaved in a similar manner, with a weekly candlestick with a wick likely to be confirmed by a resistance band around $43,000 (probably the positive line).
Although it will continue to display volatility in the short term, I would like stay calm as it is only movement within the range ($30,000 to $40,000) described earlier at the weekly and daily levels.
Mid-term and long-term
↓ BTCUSD weekly candlestick chart
Last week showed support from the resistance zone (white box near $33,000 in the figure), confirmed by a small wick of a shadow line.
This week, following the confirmation of candlesticks supported by last week’s resistance band, it showed a temporary rise (which can be linked to the gap filling of the US stock index), but it peaked at the resistance band around $43,000. As mentioned earlier, a ranging price action continues.
↓ BTCUSD Daily Candlestick Chart
Looking at the daily chart, it is easier to understand the movement is within the range.
I would like to continue the basic approach of buying low of the range and selling the top of the range.
The short term remains strongly correlated to the US index. Again, there are a lot of violent movements correlating with US100 (Nasdaq Composite Index), so be careful when trading. Especially at 23:30 when the US market opens, volatility tends to be high.
The temporary rise at the beginning of the week was linked to the movement to fill the gap of the US stock index, discussed below.
Practical example of this week’s trading ~ Gap filling ~
First, the Nasdaq Composite Index (US100) started on Monday after the beginning of the week with a large open gap as shown in the figure below.
Here I have built a buy position in both the US100 and crypto, assuming “it will move to fill this window in the short term”, that is, “it will make a transient rise”. The loss cut was taken when the US100 moved below this short-term low ($13,700). By the way, gap filling is not always a 100% certainty and is more so a turnaround within a range with the assumption it is often filled (expected value is high).
After that, price movement was formed so as to fill the gap without falling below the opening price as shown below.
Of course, BTC also had similar price movement and showed a temporary rise.
Volatility may be high upsetting many traders, so I recommend you to think in simple terms and take a position accordingly.