๐ Daily TA: Bitcoin (BTC/USD) | 18-11-2020
Hello, dear members of LeoFinance!
That's my daily crypto TA on LeoFinance and, of course, today I will talk again about Bitcoin!
So, the price of Bitcoin continues to increase on a daily basis and more and more people start to talk about Bitcoin. Earlier today Bitcoin hit $18,483 and has slightly corrected since then (intraday), currently trading at $17,645.
But, let's have a look at the price chart of Bitcoin. And, namely, the 1-day time frame (1D), because nowadays the market is quite dynamic and it is worth to keep constantly an eye on the daily chart as well. So, in the daily chart at the moment BTC/USD is forming a Long-Legged Doji: According to Technical Analysis theory, Long-Legged Doji is a candlestick formation indicating a beginning of consolidation. Some traders even view it as a trend reversal candlestick formation, if confirmed (followed) by a solid bearish candlestick.
Actually, this is what Investopedia says about Long-Legged Doji:
The long-legged doji is a candlestick that consists of long upper and lower shadows and has approximately the same opening and closing price. The candlestick signals indecision about the future direction of the underlying security.
It is used by some traders to warn that indecision is entering the market after a strong advance. It may also warn that a strong downtrend may be experiencing indecision before making a move to the upside.
Long-legged dojis may also mark the start of a consolidation period, where the price forms one or more long-legged dojis before moving into a tighter pattern or breaks out to form a new trend.
Long-legged doji candles are deemed to be most significant when they occur during a strong uptrend or downtrend. The long-legged doji suggests that the forces of supply and demand are nearing equilibrium and that a trend reversal may occur.
So, based on my experience (14 and a half years in the financial market, applying fundamental, candlestick, and technical analysis), I would say that the current Long-Legged Doji in the daily chart is just indicating that some investors (or traders) are booking profit at the current levels and BTC/USD is experiencing slight consolidation. So far, I don't consider it as a trend reversal candlestick. But, I consider it as an important signal, saying that we have to constantly keep an eye on the daily price chart of Bitcoin and see what happens in the next couple of days, namely, what kind of candlesticks will form - bullish or bearish.
In addition, I would like to mention that Bitcoin was at the current level or above it just for 6 days in its history - back in 2017 in the period of 15 Dec 2017 - 21 Dec 2017. Just 6 days! That means that the current price levels are relatively new for the market. That's why the current indecision (implied by the Long-Legged Doji) in the market is easily explainable.
Moreover, I would like to share as well, based on my experience that some people who entered the crypto market in December 2017, or, namely, at the highest prices of Bitcoin and didn't panic too much and exit the market, will close their positions now (adding some additional fuel to the current indecision/consolidation). They will close their positions because when they bought at the top when Bitcoin was close to $20,000 and then the price collapsed, these investors have experienced a tough time since then because the price of Bitcoin was relatively low and their investment shrank. These investors throughout this period (2018-2020) used to say to themselves very often (mostly at the very beginning, before they get used to the lower price and accepted somehow their "unprofitable" investment): "What a stupid investment! Buying Bitcoin at $20,000 and now it is $15,000, $10,000, $8,000 ... If Bitcoin returns one day to my entry price I will sell it, get back my money and QUIT with Financial Markets! I just want to return my initial investment and exit the market! I will not want to hear any more about crypto, investments, financial markets once I get out of this stupid situation and "bad" investment!".
Yeah, that's what most inexperienced investors say once their investment starts to shrink. To be honest, we all had such kind of periods. I even was about to quit trading/investments at least 100 times, promising to myself each and every day that if I get out of my unprofitable investments I won't ever get back to financial markets and don't even want to hear about them. Yeah, that was throughout my first 5-7 years on the market. He-he! Now, I take it easy and my investments (hopefully) are better-working.
So, let see how the market consumes the pressure from the investors who are exiting the market now, and what follows in the near future.
I will continue to constantly keep an eye on Bitcoin
To be continued ...
A few words about me:
Just to let you know: I've been working professionally as a currency analyst for the last 14+ years, and as a cryptocurrency analyst for the last 3+ years.
Important!
Keep in mind, that thoughts expressed here are my own, and they should not be regarded as recommendations for any cryptocurrency/commodity trades, investments and etc.
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