Bitcoin Update: BULLISH breakout but BRACE yourself for a BITCOIN CRASH!
Summary
TLDRIn this video, Nick from Chy Crypto discusses Bitcoin's current price action and future predictions. He analyzes the potential for a breakout based on the 50-day simple moving average, targeting a profit range indicated by a yellow box on the chart. Nick also references Elliot Wave Theory to predict a three-wave move upwards, with a target range of $69,700 to $72,200. Despite the overbought daily momentum indicator, he suggests there's more room for an upside before a probable reversal. He also considers the impact of external factors like the Federal Reserve's decisions on market volatility. The video concludes with a cautious outlook, suggesting a potential correction to the downside, aligning with smart money concepts and Elliot Wave Theory.
Takeaways
- 😀 Nick, from chy crypto, discusses Bitcoin's current price action and future predictions.
- 📈 The video focuses on a potential breakout or breakdown in Bitcoin's price, using moving averages as technical indicators.
- 💡 Nick suggests a good entry point and a tight stop loss under the 50 Simple Moving Average (SMA) for a favorable risk-reward ratio.
- 📊 The daily time frame shows Bitcoin in a profit with a risk-reward ratio of about 3.52, indicating a positive outlook.
- 📚 Elliot Wave Theory is used to analyze the three-wave pattern, suggesting a potential upside movement.
- 🚀 The breakout above the 50-day SMA and EMA indicates a bullish trend, with a target range of $69,700 to $72,200.
- 📉 Despite being overbought on the daily momentum indicator, the market could still experience an upside before a reversal.
- 💹 The Relative Strength Index (RSI) is above 50, suggesting a macro bullish trend but also potential volatility due to market makers.
- 🌐 External factors like the Federal Reserve's actions and the US Dollar Index (DXY) can influence Bitcoin's price significantly.
- 📝 Smart Money Concepts and volume profile analysis suggest filling fair value gaps, hinting at a possible price correction to the downside.
- 🔮 The video concludes with the anticipation of a correction to the downside, aligning with the 200-day exponential moving average and fair value gaps.
Q & A
What is the main topic of discussion in the video by chy crypto?
-The main topic of discussion in the video is the current state and future price action of Bitcoin.
What is the significance of the 50 Simple Moving Average (SMA) and 50 Exponential Moving Average (EMA) in the video?
-The 50 SMA and EMA are significant technical indicators used to identify potential entry points for trades and to set stop losses in the Bitcoin market.
What is the target range indicated by the speaker for Bitcoin's price movement?
-The target range indicated for Bitcoin's price movement is between $69,700 and $72,200.
What is the profit-risk ratio mentioned in the video for the current Bitcoin trade?
-The profit-risk ratio mentioned for the current Bitcoin trade is approximately 3.52.
How does the speaker approach Elliot Wave Theory in the context of Bitcoin's price action?
-The speaker uses Elliot Wave Theory to analyze Bitcoin's price action, specifically looking for a three-wave pattern to predict future movements, while acknowledging that the accuracy of the theory depends on the analyst's ability to correctly apply it.
What is the speaker's view on the current momentum indicator for Bitcoin?
-The speaker notes that the momentum indicator is heavily overbought on the daily time frame, suggesting a higher probability of a market reversal.
What is the role of the Relative Strength Index (RSI) in the speaker's analysis?
-The RSI is used to assess the overall bullish or bearish momentum on a macro scale. However, the speaker mentions it's less useful for predicting price action in the current continuation pattern.
What is the significance of the 200-day Exponential Moving Average (EMA) in the speaker's analysis?
-The 200-day EMA is considered a key support level and a trend filter in the speaker's analysis, suggesting that it is an important area to watch for potential price reversals.
What does the speaker suggest about the potential future price action of Bitcoin based on Smart Money Concepts?
-The speaker suggests that based on Smart Money Concepts, there is a high probability of Bitcoin's price filling out fair value gaps, which aligns with the idea of a three-wave corrective pattern to the downside.
What is the speaker's strategy for trading Bitcoin based on the current analysis?
-The speaker's strategy involves either going long if there is a clean breakout to new all-time highs or shorting the market if there is rejection at the trend line and the expected price range of $69,000 to $72,000.
Outlines
📈 Bitcoin Price Action and Elliott Wave Theory Analysis
In this segment, Nick from chy crypto discusses the current state of Bitcoin, focusing on price action and potential future trends. He emphasizes the importance of the 50-day simple moving average (SMA) and the 50-day exponential moving average (EMA) as key indicators for trading breakouts or breakdowns. Nick outlines a trading strategy with a target range indicated by a yellow box on the chart and a risk-reward ratio of 3.52. He also touches on the concept of a relief rally and the application of Elliott Wave Theory, noting that while the theory can be accurate, its success depends on correct application and分析师 (analyst) interpretation. The video suggests that Bitcoin has met minimum expectations based on a three-wave move and is approaching a downward trend line, aligning with a targeted price range of $69,700 to $72,200.
🚦 Potential Market Reversal and Continuation Patterns
Nick continues by discussing the possibility of a market reversal, as indicated by the stochastic RSI being in an overbought condition. He references Elliott Wave Theory's suggestion of more upside progression before a reversal. However, he also notes the likelihood of increased volatility and the role of market makers in extracting liquidity during continuation patterns. The discussion includes the importance of the 200-day exponential moving average as a trend filter and potential support level. Nick also considers the impact of external factors, such as actions by the US Federal Reserve, on market volatility. He concludes by stating that while the macro outlook remains bullish, traders should be prepared for potential short-term corrections and volatility.
📊 Analyzing Volume Profiles and Market Liquidity
In this part, Nick examines volume profiles and liquidity in the Bitcoin market. He notes the presence of significant liquidity at lower price ranges, which could be a concern for market stability. He discusses how market makers might capitalize on areas with high liquidity and the potential for extreme volatility due to external economic factors. Nick also highlights the importance of being mindful of fair value gaps and the alignment of smart money concepts with Elliott Wave Theory in anticipating a correction to the downside. He emphasizes the high probability, though not a guarantee, of filling out these gaps and the importance of considering real-world economic indicators when trading.
🔍 Weekly Time Frame Analysis and Market Sentiment
Nick shifts the analysis to the weekly time frame, noting that Bitcoin is trading above the Gann Channel, which is a positive sign. He points out that the market has not tested the support levels of the 50-week exponential moving average and the 50-week simple moving average since October 2023. The video suggests that any downside move will likely coincide with these support levels. He also discusses the lack of volume in certain price ranges on the weekly chart, indicating potential areas where price action might fill out liquidity gaps. Nick concludes by inviting viewers to share their thoughts in the comments and to engage with the crypto community for further insights.
Mindmap
Keywords
💡Bitcoin
💡Price Action
💡Simple Moving Average (SMA)
💡Exponential Moving Average (EMA)
💡Risk-Reward Ratio
💡Elliot Wave Theory
💡Stochastic RSI
💡Divergence Indicator
💡Relative Strength Index (RSI)
💡Volume Profile
💡Smart Money Concepts
💡Gannian Channel
💡DXY
Highlights
Discussion on Bitcoin's price action and future trends.
Use of technical analysis with 50-day simple moving average (SMA) for potential breakouts.
Profit-risk ratio of 3.52 for Bitcoin trades, indicating a favorable position.
Relief rally and three-wave pattern analysis using Elliot Wave Theory.
Importance of correctly applying Elliot Wave Theory to avoid high failure rates.
Target range for Bitcoin set between $69,700 to $72,200 based on analysis.
Momentum indicator showing Bitcoin as overbought on the daily time frame.
Expectation of a reversal in the market due to overbought conditions.
Analysis of stochastic RSI and its implications for potential market movements.
Relative Strength Index (RSI) indicating a bullish macro trend despite current volatility.
Potential for market makers to extract liquidity during continuation patterns.
Analysis of volume profiles and their impact on Bitcoin's price stability.
Smart Money Concepts suggesting a correction to the downside to fill fair value gaps.
Importance of the 200-day exponential moving average as a trend filter and support level.
Potential impact of external factors like the FED and CPI data on Bitcoin's price.
Identification of fair value gaps on the weekly time frame that may be filled.
Garian Channel analysis indicating a good buying opportunity for Bitcoin.
Weekly time frame analysis suggesting a possible correction coinciding with moving average tests.
Transcripts
good morning you cheeky Bunch today we
are discussing what's going on with
Bitcoin discussing the price action and
where I think things are heading let's
see if we can smash up that like button
up towards 500 likes guys really do
appreciate that if you are new to the
channel welcome this is chy crypto my
name is Nick and we are discussing a
Bitcoin subscribe if you want to stay up
to date with more content from the
channel let's jump right down into
today's video BTC paired up with usdt
we're on the one day binance chart and
things are progressing quite nicely so
following on from the previous videos we
had that idea um for a breakout right so
we're talking about if we were to get a
Clos position above our um 50
exponential moving average 50 uh simple
moving average so the simple moving
average being the yellow line here what
we do is we'd be looking for a good
entry a tight stop loss underneath the
50 simple moving average and we're
targeting out that slightly higher range
as indicated in the yellow box this is
looking pretty healthy right now right
so we can see here we're in good profit
the risk reward ratio is about 3.52 and
it's looking pretty good on the daily
time frame right um so all looking good
from that kind of idea that we're
talking about how we like to trade
breakouts or breakdowns uh there's two
different ways that we could have looked
at this the exponential moving average
breakout uh which is the blue line down
here with a tight stop loss underneath
and again still targeting out that
higher range would have been a greater
risk World ratio but you wouldn't have
had confirmation it would have been
5.63 and of course we had the one for
the simple moving average the one that I
probably would have taken here so
knowing this and knowing our Target is
still 69,7 to
72,2 uh we're in a pretty good spot
right there's still some potential for a
bit of a move to the upside now this is
a relief rally that we've been
discussing for a while it's a three-wave
pattern uh Elliot W theory of course is
very accurate if you do it correctly if
you do not draw it correctly uh on a
highly liquid market like Bitcoin then
unfortunately it does have a tendency to
fail its failure rates are not due to
its um properties as an analytical uh at
all its failure rate is due to the
analyst right so you're never going to
get it right 100% of the time and
because you can obviously see lots of
different patterns and potential
patterns inside the candlesticks and
obviously there's lots of rules to kind
of think about when it comes to Elway
Theory I I'm looking at this as a
three-wave move to the upside and so far
it's playing out incredibly well as per
the rules of Elliot way Theory as I've
said many times before Elway theory is
absolute it always fits you can try back
testing it and it has a 100% fit rate
because it is designed to do that and
you have to identify the correct pattern
for what is happening in the future
right that's the difficulty and that's
why so many people draw it incorrectly
they allow for their bias to come in and
they don't actually allow for the rules
of absolute to actually filter through
okay so knowing the Elliot way theory is
looking pretty good we obviously had the
breakouts of the 50 uh daily SMA the 50
uh exponential moving average the EMA
here everything's kind of looking quite
nice to head up towards our downward
trend line which is this upper area we
hit this area on the 14th of March and
on the 8th of April and I think we're
going to come right in line with our
targeted range here on this trend line
so 69,7 to
72,2 200 or
72167 to be more exact now with this
move to the upside it's worth noting our
minimum expectations have already been
met we don't have to go up higher um but
that is the area that Elliot way Theory
tells us is the most likely okay so we
have already br broken the previous
swing High over here on the 6th of May
okay so by going higher than this area
we have already met the minimum
expectations and have already kind of
met those minimum expectations of a
three wve move right it can just fall
short of its expected and typical range
which is up here between that 69 and
$72,000 right so that's kind of where I
think things are heading now taking a
look at the momentum indicator we're
already heavily overbought on The Daily
time frame but we can still be here for
a little bit longer we don't have to
remove uh move all the way down to
oversold just because we're up here um
but we are of course reaching those
upper areas at the moment we are of
course up there at
99.32 100 of course is Max um and uh
yeah we will see reversals here now we
can be up here for quite some time I
mean for example in this particular case
over here it's the 9th of February we
didn't see major movements until the
17th of February right and that was on
this move to this higher side if we take
a look at where actual moves up here we
could see that this is actually the 29th
of January through until the 16th of
February right we started this move on
the 14th of May it's currently the 19th
of May so we're a little bit way through
it right obviously at the same time we
can come straight way back down right we
can be up here and then all of a sudden
just drop all the way down this is
because the stochastic RSI does not give
you an indication to price movement it's
only showing you whether or not there is
momentum behind the price action and at
the moment with momentum indicator being
overbought the way that it is it shows
us that there's the potential now a
higher probability that the market is
going to reverse right it's likely to
move down now Elway Theory tells us that
we have a little bit more progression to
the upside and I think that's really
where we are likely to see this thing go
a little bit further to the upside
before we get that reversal to the
downside but we are looking for a
reversal okay
nonetheless now if we come back into our
stochastic RS turn them off and turn on
the Divergence indicator this yellow
line is the relative Index right and
this is good for Trend unfortunately
we're not in a trend at the moment we're
in a continuation pattern so the
relative strength index isn't going to
give you a huge amount of advantage in
trying to predict where the price action
is going but it is above the 50 level so
again on a macro scale we are still
bullish and I agree with that but we are
still in that continuation pattern
meaning that we are likely still to see
more volatility with market makers
basically extracting a lot of liquidity
out of the market I don't think we're
done just yet as much as I would love us
to just kind of go up into new alltime
highs and be done with all of these
moves to the downside I suspect the
market makers have other things planned
and so we should be very mindful that
this Market is all about extracting
liquidity during these continuation
patterns they're not ready to pump it up
after seeing such significant surges to
the upside at the moment and there's
huge opportunity in all of that of
course now if we go ahead and
um back into our price chart here on our
uh daily time frame you can see that my
expectation is to test that lower trend
TR line that lower trend line will be in
line with our 200 day exponential moving
average which is currently sat at
53,8 36 and I know some people will
disagree with me thinking that that's
just not likely to happen um but I do
see this as a three-wave corrective
pattern taking us down towards our 200
day exponential moving average and this
continuation pattern this bullish flag
however you want to look at it will then
actually continue to set the lower highs
and the lower lows before we get that
break to the upside the importance of
the 200 day exponential moving average
cannot be ignored now it's possible that
we can ignore it for a little bit longer
when we did over here for example in
January of 2024 but for the most part
this is an area that's usually a very
key for finding support right you might
come down briefly then rally up from it
right the 200 day exponential moving
average is your Trend filter it's
critically important that we don't
ignore this that we do need to find
support on this level so I'm hoping that
you know we don't have to come down all
this way way but I suspect we probably
will and we have this idea of a
three-wave corrective pattern and the
reason for that is that Elliot way
Theory tells us that we're not in a
trend to the upside here um simply
because we were in a three-wave pattern
right we haven't actually got any clear
breaks above 1.618 on the Fibonacci
extension scale indicating that
unfortunately things are not what they
might seem I know a lot of retail
investors who look at a lot of other
indicators and they be saying yeah we're
bullish we're bullish we're bullish but
on our daily time frame although are
bullish on these macros we have to
expect more volatility because we
haven't seen the right structures the
right candle patterns to say that we are
likely to get that next clean break to
the upside where was my where would my
thoughts and opinions change on this
well a new alltime high would definitely
do that um not a guarantee but I think
it would set the the idea and the stage
for those 1.618 impulsive trigger points
to get hit um so that's kind of what
we're going to be looking for here we're
going to be looking for a clean break
above our trend line into new all-time
highs if we see that we'll go long we'll
tight stop loss and we'll Target out
probably towards $8 $2,000 something to
that effect to start with and probably
put a trailing stop to just follow the
price action as it moves up because we
go into price Discovery at that point
but if we do not see that then and we
actually get rejection here on our trend
line and from our expected range between
69 and 72 well the obvious thing there
to do of course is to short the market
tight stop loss above our previous swing
high for security reasons and of course
we t Target down towards that 200 day
exponential moving average right again
risk World ratio about 5.98 this means
that it doesn't really matter what the
price action does right all we're really
doing here is saying okay we're going to
break out we're going to go long and if
we get rejected we're going to short the
market right and we're going to make
money either way we don't really want to
be kind of you know just saying oh we
can only go long we're bullish we're
bullish it's clear breakout the
sentiment bullish that stuff isn't
inside the data the data is very clear
to us we do not have a clean breakout
here where we have the idea of a
structure that is impulsive and is in a
trend upwards okay but if we get a
breakout that changes and so if we have
the breakout we can go long if we don't
get the breakout then we can go short
and we can make money okay this is
important that we understand we just
want to trade against the sentiment to a
degree and we want to make sure that
we're on the right side of the argument
now market makers are great at this
because they have significant control
over the markets right not just Bitcoin
but also the altcoin market everything
moving in tandem is not a coincidence
right and so when you find the liquidity
in the market things start to make a
little bit more sense if we take a look
at our volume profiles from the vpvr now
this is obviously only taking into
consideration the candles that you see
in the chart at the
moment if I zoom out of this just a
little bit and get some more candles in
you can start to see that there isn't a
lot of volume here in relation to the
historical price movements a lot of the
volume is down here at this lower range
and this is a huge concern because
there's a lot of liquid liquidity in and
around these lower areas okay market
makers know this market makers are going
to be looking at those areas and
wondering whether or not they can H can
actually push the price down there now
I'm don't think they're going to be that
extreme but if we were to see something
crazy from the uh the US government or
more specifically the FED um then we
might see you know some extreme
volatility that does you know create
some imbalances in the say the dxy the
Dixie in relation to all assets right
because everything that's paired up
against usdt usdt of course is stable
against USD and of course if we see any
price fluctuations with the Dix or any
um any adjustments or fluctuations with
the Dixie due to say Fred interest rates
and things like all the things that we
talk about with our members down in our
Discord server then we are likely to see
extreme volatility which our market
makers will capitalize on so we need to
be aware of those things now we don't
talk about them very often in these
videos on the public side of things
simply because uh we talk about it quite
bit for our members in our amas and that
kind of stuff and as you can see down
here at $442,000 there is a lot of
liquidity to be seen so be very mindful
of where the previous volumes were uh
obviously you can take a look at the
shorts the Longs all that kind of good
data uh and see where that kind of stuff
lies as well from a smart money Concepts
point of view we're still in bullish
pattern on The Daily time frame we're
not concerned about any of those things
all of that is looking very healthy and
very good um so yeah for the most part
smart money Concepts is fine the are of
course still Pockets here of fair value
gaps that haven't been filled so we're
going to be mindful about those um you
know basically all these green areas
that you see on the chart here these are
showing you where there was a lack of
liquidity and price likes to come back
down and fill those out for example
there's a pocket right over here and if
I pull this across you can see that
price came down and filled that pocket
where there wasn't liquidity before the
market put liquidity okay and so there's
a few areas on this move to the upside
most recently where again there's
pockets of illiquidity as in the market
didn't have liquidity so the price has
to go up higher to find the sellers and
so forth right and so as we can see here
there's going to be a reversal more
likely to fill out those areas there's
also one down at this lower range
between 51 and 54,000 it's not a
coincidence that this is also where our
lower trend line is also where our 200
day exponential moving averages and also
the area of a three-wave correction that
we like in my opinion to see this means
that we fill out all the fair value gaps
that you can see here from a smart money
Concepts point of view so whether you
are a fan of Elliot way Theory whether
you think it's absolute garbage maybe
you're a fan of smart money Concepts
smart money Concepts is also aligned to
the idea that we still have this
correction to the downside we're in a
still in a bullish structure on a macro
scale none of that has changed but there
are some fair value gaps that typically
do get filled out it's not a guarantee
they have a high probability of getting
filled out though so just bear in mind
that there's nothing as a guarantee in
this space but there's a high
probability that we do see these moves
to the downside edit way Theory smart
money Concepts um are turning us even
the trend lines with the lower low lower
highs and lower lows they are all
telling us that we are likely to see
more continuation of this pattern then
of course we factor in the real world uh
what's going on with the FED over in the
US the CPI data all of these things are
going to have an impact the Dixie will
have its role to play whilst the demand
is low which it is um and once demand
comes in the Dixie has less impact on
the price action so just bear that in
mind sometimes the dxy will go one way
and Bitcoin will just simply follow it
right and that is due to a significant
demand shift okay um so all in all it's
looking pretty good on the daily time
frame and I'll turn some upart money
Concepts off here for now as well if we
throw on the Garian channel on The Daily
time frame you did turn red indicating
that this is a an area where we want to
be dollar cost averaging because value
is now there um for kind of purchasing
up but we are above the the midband um
we are not above the higher band in
terms of these simple moving averages
that you see within the Garian Channel
okay very interesting stuff roll us up
into the weekly again you can see a nice
weekly candle here um for BTC uh still
heading out towards our targeted range
of 69 to 72 before we move on down the
move to the downside will coincide in my
opinion with the 50 weekly exponential
moving average and the 50 weekly simple
moving averages right which were last
tested over here in October of 2023 and
found as support as you can kind of see
we haven't tested these supports of the
exponential moving average or simple
moving average since 2023 on the weekly
time frame the Garian channel is looking
uh pretty good as well we are heavily
above the Garian channel on the weekly
time frame this is indicating a Prett
good healthy stuff since we saw this
kind of breakout clean breakout really
in October of
2023 again all around when we found
support on the 50 exponential weekly
average
um so all in all that's looking pretty
good as well through on the vpvr you can
see that the volumes are significantly
lower there's Pockets where there's just
simply isn't any volume on this weekly
time frame and you can kind of see that
right in there between 53 and
$57,000 and that's why we see these
bigger candles in the market here smart
money Concepts will align if I throw
that on as well you can see right here
where there's a pocket where um the vpvr
is showing no volume on the weekly time
frame it also happens to be where
there's a fair value gap on smart money
Concepts again all an indication that
there is a lack of liquidity at certain
price ranges and we are likely to get
that field out and it's not a
coincidence once again that these are
the areas on the weekly time frame where
we can quite clearly see that there's a
lack of liquidity between 53,000 and
58,000 this particular area happens to
be right in line with the three-wave
corrective pattern on Elliot wave theory
right in line with the 200 day
exponential moving average everything is
kind of showing us that this is an area
where we're likely to see the price
action go now we hope that that's not
the case we hope for the breakout
because we want to be bullish on the
market but the data is quite clear to me
that we need to be very mindful that
there is a correction to the downside to
come now guys you can let me know your
thoughts and opinions in the comments
down below and if you haven't done so
already smash that like button and check
out this video where we discuss what's
going on in the crypto space
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