- February 7, 2023
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
We have used the Supertrend indicator on Bitcoin (BTCUSD) extensively, especially on lower time-frames with great accuracy. This time we take a look on the 1W chart where the Supertrend has been green since the second trading week of January. Throughout BTC’s history every time the Supertrend turned green after such an RSI rebound, the bottom of the Bear Cycle was formed.
The strength on such Supertrend rallies is normally so strong that the price typically rarely breaks or more importantly closes below the supporting line (floor). Bright exception has been of course the build up to the 2022 COVID crash (which as mentioned countless times is a 1 in 100 years event, thus an irregularity).
This ‘floor’ of the Supertrend has now been lifted to $17240, which was unthinkable in e.g. December as it was a Resistance. Traditionally we don’t see immediately pull-backs to the floor on the first Bull Cycle rally. Instead, when the price breaks above the 1W MA50 (blue trend-line), BTC has always reached the 1W MA100 (green trend-line) before a major Bull Cycle pull-back.
The 1W MA100 is currently at 36150 (and falling). So with the 1W MA100 around 36k and the Supertrend’s floor at 17.2k and rising, does that look like a solid Risk/ Reward ration trade for you or not?
Feel free to let us know in the comments section below!