16
Apr
20

Evolve or die - Bitcoin Technical Analysis

That might be too strong a title, but it’s not! The law of evolution is principle based, saying that adoption is required especially in times of rapid change. It is without a question such a time. For example, a successful carburetor specialist, on the day fuel injection came to the market, was out of business. Nowadays for example, one can’t blindly hold short- and long-term oil related investments. What happens if these oil markets get ill liquid because alternative energies take over? Or consider someone hoarding cash and hyperinflation renders fiat currencies worthless? What if you store all your wealth in physical gold and the government passes a law, like it did in April 1933, claiming gold to be illegal for private ownership? What if your real estate holdings are confronted with exuberant government taxation or compulsory state mortgage? Questions like these are discussed in our free telegram channel. We find answers! Evolve or die.

 

One of our answers towards wealth preservation in these challenging times is owning crypto currencies. Trillions of new dollars have been printed out of thin air. But Bitcoin can not be hyper-inflated. Hence, Bitcoin provides a possible hedge since the underlying code limits the supply to 21 million.

 

ETH-USD, Daily Chart, Income Producing Weekly Trades:

 

ETHUSD daily chart as of April 14th, 2020
 

A recent trade of ours in Ethereum, on the shorter weekly time frame, produced a runner profit of 64%. Not only looking at Bitcoin and not only trading monthly or annual time frames is a diversification method worthwhile exploring. Flexibility is key and as this trade shows, nice gains can be achieved on shorter time frames as well.

 

BTC-USDT, Monthly Chart, Bullish Formation, Anticipated Breakout:

 

BTCUSDT monthly chart as of April 14th, 2020
 

The macro picture shows a bullish triangle formation. Taking an approach to wait and see would only provide a breakout scenario. The most obvious and confirmed way of trading, but also the least attractive from price and most of all risk perspective. Trying to anticipate such a breakout and already being positioned can provide much better trade risk and entry price level.

 

BTC-USDT, Weekly Chart, Evolve Or Die, Looking To Stack An Edge:

 

BTCUSDT weekly chart as of April 14th, 2020
 

To get early positioned, dropping a time frame like we did just here from the prior monthly chart, to the one above representing a weekly chart is one way of doing so. By looking for a low risk setup on the lower time frame one also stacks edges and reduces risk. This as well as entering with a smaller time frame = smaller stop, into a possible larger time frame expansion. Our quad exit strategy provides the necessary tool to transfer into a longer holding period for the runner part.

 

Evolve or die

 

In an ever evolving universe, constantly expanding and growing, there is no such luxury as a static black box system. Accordingly, one can not lean back and only focus on a single niche. You need to look at related markets, multiple time frames, micro and macro events. You need to back-test and forward-test and can’t rely merely on hard coding and AI. Look at markets from various angles! Right now a wave of domino effects has been triggered that will affect many cycles and behaviors of the markets, which need to be brought into consideration. Therefore, the highly flexible individuals that think outside the box and prepare for the short and long term with an approach that includes many facets, will survive this economic transition. Consequently do not hold on too tight to old paradigms that might not suit a new world to come.

 

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If you would like to learn more about Bitcoin fundamentals, check out the ultimate guide here.

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Korbinian Koller
Technical Analyst