Topdown Analysis Of BTCUSDT Using Support And Resistance Strategy And RSI Indicator As A Confluence

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Hello great minds,

It is a great opportunity to appear before you all today to share my analysis on bitcoin.

I believe you are all doing perfectly fine and are enjoying your activities in the community as you actively share in steemit promotion across various social media platform.

Bitcoin as we know it, is the father of all other cryptocurrency and it is worth carrying an analysis on, since it is the driver of all other cryptocurrency in the cryptospace.

Today, I will sharing my analysis of btcusdt and I will be beginning from the monthly timeframe.

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ANALYSIS USING SUPPORT AND RESISTANCE STRATEGY

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My analysis often begin from the higher timeframe and it moves to the lower timeframe.

On the higher timeframe like the monthly timeframe, I identify market trends, and on other timeframe I search for key market levels and also search for entries into the market.

The above screenshot is that of btcusdt on the monthly timeframe as we can all confirm.

And from the above screenshot, we can see that there are less candles on this timeframe, and this is because each candle formed on this timeframe takes an activity period of one month.

Also on this timeframe, we can notice that the market trend is easily identified, and from the screenshot above, we can see that Bitcoin market is bullish overall.

I then decided to continue my analysis by moving to the weekly timeframe, and on this timeframe, I could see the market more clearly, I could see the formation of more candles as each candle on this timeframe takes a trading period of 7days to be completely formed.

And looking carefully, I was able to identify a key level and this level is functioning as support level to the market price, and the market is expected to be rejected when it trades towards this level.

From the above screenshot, we can see that this level is a valid level, and the market always shows a unique reaction when it trades towards this level.

And moving to the daily timeframe I could see the market more clearly, I could see the formation of bullish and bearish candles which shows the presence of buyers and sellers in the market.

And looking carefully, I was able to identify another key level and this level is functioning as a resistance level to the market price.

And from the above screenshot, we can see that the market has made several touches on this level which shows how valid this level is.

And moving to the 4hr timeframe, I could see lots of noise in the market, I could see the presence of the buyers and sellers as they struggle to drive the market to their preferred direction.

And this made the market to range, that is, it was neither in an uptrend or a downtrend as both buyers and sellers showed equal strength in the market.

And moving to the 2hr timeframe, I could see the buyers displaying strength over the sellers.

And looking carefully, the market has broken above its resistance level and we can expect to see a retracement of the market to retest this broken level, and then we can take our trade to the upside.

And before doing this, I decided to search for confluence using the relative strength index indicator.

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CONFLUENCE USING RELATIVE STRENGTH INDEX INDICATOR

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The relative strength index indicator is an indicator that helps to identify overbought and oversold market.

When a market is spotted to be overbought, it is a bearish trend reversal signal and when it is oversold, it is a bullish trend reversal signal.

An overbought market can be spotted when the rsi crosses above the 80% line and an oversold market is detected when the market crosses below the 20% line.

Applying the rsi to the monthly timeframe, I could see that the market is being overbought and an overbought market can be signaled when the rsi crosses above its 80% line.

And when this happens, the market is understood to give a bearish trend reversal, that is, a change in market strength from the buyers to the sellers.

I then moved to the daily timeframe to add the rsi indicator, and adding the rsi indicator, I could see that the market is being overbought and an overbought market signals a bearish trend reversal.

It is a market condition that shows the weakness of the bulls and the strength of the bears at the moment in the market.

Although I have a bullish bias of the market, I expect the market to retrace to its broken resistance level to retest this level.

And when this level is retested, I expect to see a bearish move, and as such I placed my entry on the closest support level to the price chart.

And I placed my take profit in a way that I get a risk to reward ratio of 1:3.

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CONCLUSION

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Bitcoin is the father of all cryptocurrency and it is the driver of all other altcoins in the cryptomarket.

I have shared my analysis on the market and I expect to see a momentary bearish retracement and a bullish continuation move.