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Short Term Trade Opportunity

Initial Prediction

This is going to be the first article in which I will follow the formation of a pattern on the chart as it is forming. As mentioned just a few hours ago, BTC surged over 10k just earlier tonight. It had a bearish RSI divergence occur on a higher time frame, with a subsequent drop in price.

A patter in technichal analysis called the bearish flag seems to be forming on the 5 minute time frame. It occurs after a drop in price, the price begins a small rally upwards, entering into a small upward channed before being cut off and falling further.


BTC 5min chart: 5/8 5:15 UTC

Hopefully that chart makes things clearer. There will be a lesson on flag patters in the future. I will continually post updates through the night. Since this is on such a low time frame i would expect this to develop over just 60-90 minutes, or 12-18 candles.


First Update


BTC 5min chart: 5/8 6:00 UTC

If you'll note the current bullish RSI divergence forming, price making way for lower low while RSI trends upwards. You can learn all about RSI and more in the Technical Training section, link's in the header above. Anyways, the formation occuring on its way down to our level is a good sign it will act as support when tapped in the near future.

Also duely noted is the constriction of the bollinger bands and the price riding along the lower boundary. This indicates further slifing in price to come, further validating our level.


Second Update


BTC 5min chart: 5/8 14:10 UTC

BTC finished the formation of the bullish RSI divergenece as soon as it wicked into our zone. A succesful overnight chart of the pullback.

We now see continuation back to the upside as BTC begins a new rally towards 10k. It hs however reached some level of resistance at 9970.

Stay posted for another udpate as the day unfolds. Lower time frames like this always present good trades to enter into overnight so if you were smart enough to buy in that zone, Penny Coin Strategy also working well as I predicted that top and now awaiting bottom to re-enter.


BTC 5min chart: 8/20 14:20 UTC

This is likely the next scenario. The ray is placed at the lowest close before this rally, BTC hitting that level would mean a higher low formed. Therfore a bullish market structure begginging to reform.


Penny Coin


ADA 5min chart: 5/8 21:30 UTC

As BTC coninues to be uncertain of it's price direction, ADA has just reclaimed the 3/7 high level it had fallen under. A significant flip of this level could invalidate the red trendline and signal further price continuation to the upside. More likely the trendline will act as resistance, and a re-test of the 3/7 level will occur. Update to come within next 120 mins.


Penny Coin Update One


ADA 5min chart: 5/8 22:20 UTC

Trendline acted as it was intended and the price wicked deep into the 3/7 high zone. One more test on the trendline before a break and close below the 3/7 level is coming up next. Look at the RSI, see how it has slid violently while price just marked a lower low? That is a good sign there will now be a lower high before that break and close. Next update in about 120 mins.


Penny Coin and BTC Strong Correlation


ADA 5min chart: 5/8 23:50 UTC

Trendline acted as reistance and now beggining of leg below the 3/7 High level. Next to come, a secon retest of BTC on that level we predicted last night which it hit. A second tap of this support in BTC would signal strong support before a move up towards the weekly resistance level at 10.4K. Chart for BTC below, check back in th enext 120 mins for another regular update.
BTC 5min chart: 5/9 2:00 UTC


Penny Coin and BTC Update One


ADA 5min chart: 5/9 2:00 UTC

As stated, trendline currently being tested for resistance. If closes above it persist higher, a following pullback to confirm it as support would be an indicator of higher levels to come. That puts the retest for support around the 0.05250 range which makes sense since we have yet to get steady control over 0.05300 level. Currently waiting on confirmation from BTC on immediate future's direction.
BTC 5min chart: 5/9 2:00 UTC

BTC Looking weak after another rejection abover 10k, and falling towards its own midrange level. As denoted this level seems to be the equivalent of ADA's 3/7 high. As i noted since the beggining of this Penny Coin Strategy, I advocate users of the strategy to align levels across currencies. BTC's 3/7 High has been long broken for two days now and if tested again will likely act as support. However on ADA, it it still struggling to break above early March levels.

ADA will likely break or at least wick past that trend line beacuse it acts with great volatility as compared to BTC's more subtle moves. A break and close below the BTC level at mid-range wouls signal a break below the lower boundary to come. If this occurs a re-test of the 3/7 high is very likely as that will be first area of major support. Next update in the next 120 mins.


Penny Coin and BTC Update Two-Overnight Prediction


ADA 5min chart: 5/9 4:10 UTC

ADA has dropped back, found support, and seemingly flipped the red line. Now reaching back towards the level at 0.05299 and looking to reclaim that area of reistance. With BTC as low and close as it is to the mid-range level, which is ADA's 3/7 High, this makes sense but brings cause for concern. Trading is about risk management and being ready for the possibility your trade is wrong, that being said I see BTC having a solid night. The Czech Republic, Georgia, and Iceland are all just waking up. These are the top 3 countires in terms of mining behind China, which makes them significant stakeholders. They will wake up to seeing BTC having tested ane be rejected at 10k four times today. This could result in them seeing BTC as attempting a break out and cause a self-feeding frenzy baove 10k finally into weekly resistance at 10.4k which has been in play since October. Rejection of this idea would be a fall below mid-range into the lower boundary and no immediate buying, creating a large wick. Until that is seen, BTC seems to be forming a bullish market structure.
BTC 5min chart: 5/9 4:10 UTC

This will be the last update for the night, check back tomorrow around 11-12:30 ET for a new update on the above overnight prediction!


Penny Coin and BTC Overnight Update One


ADA 5min chart: 5/9 16:10 UTC

ADA found support along the lower boundary blue trendline. The invalidation scenario of the overnight set up occured, giving opportunity for some cheap entries down in the 0.05120 range, while it is now trading back in the 0.05250 area.
BTC 5min chart: 5/9 16:10 UTC

BTC struggling to break back above the lower boundary level now trading in the 9700 range. A break and close back above upper boundary of that area enclosed by the two green perforated lines would signal a run back up towards 9800 to come. At that point the price will be looking to treat that line as resistance, meaning if rejected another dip back to 9650-9700 would be entirely possible. Next update in next 120 mins.


Penny Coin and BTC Overnight Update Two


BTC 5min chart: 5/9 18:10 UTC

BTC with some bullish RSI divergence happening from 7:00 UTC to 11:30 UTC before this run up back into our zone. Now seeing bearish divergence playing out as it reaches for the upper boundary around the 9831 level. Another push higher in price and a continuing fall in RSI would be a good indicator thatlevel is now reistance nad a pullback to the mid 9600 range could occur again today. Invalidation of this would occur if BTC were to bounch off the upper boundary of the green zone it is currently trading back above and reclaimed the level in a short time frame realtive to when this possible rejection occurs. This bullish scenraio is shown below with the line drawn explaining the price action just described.
BTC 5min chart: 5/9 18:10 UTC


Penny Coin and BTC Overnight Update Three


BTC 5min chart: 5/9 19:50 UTC

BTC starting to gain traction. After a small pullback in price and a deep dip into the mid range on the RSI, sellers seem to be losing control. As the price begins to creep along the green line, which is not meant to act as trendline but rather a general price direction expected over a certain period of time. This drawing seems to be lagging a bit as it has slumped first whereas I predicted an initial uprise. The rise will be seen forming here as the level from the beggining is still in play and now been flipped as support. A bullish market structure is now reforming itself after last night's invalidation

If you are looking for a resource to learn about RSI, trendlines, and more technichal analysis tools to understand my posts, use the technical training section in the section header above, or click here. Next update in the next 120 mins.


Penny Coin and BTC Overnight Update Four


BTC 5min chart: 5/9 21:10 UTC

More divergence! BTC just posted another bullish RSI divergence, signaling a strong market reversal to come. The reason I beleive it to be strong is that itis posting a higher low as compared to the last time it had a bullish RSI divergence, just last night. All the blue lines correlate on the price to the RSI values and you can see each has led to a trend reversal of somewhat large proportion. Could this be the next ride to 10k? Possibly but first it has to break back above the midrange level at 9830. If you'll note i erased the drawing from above, as it was invalidated, and shifted my uptrend arrow to signal to start in the near future, by around today's daily close.


ADA 5min chart: 5/9 21:10 UTC

Brining back ADA, those trendlines from earlier have now converged. The lower blue boundary has yet to be tapped again, as price got close but reversed before making contact. Therefore I have removed the line as it is no longer likely it will come into play. The red trendline has been shifted upwards to an angle with more confirmations, more accurately describing current price constraints. BTC retesting it's midrange wil coincide with ADA retesting this upper red boundary again.

If you are looking for a resource to learn about RSI, trendlines, and more technichal analysis tools to understand my posts, use the technical training section in the section header above, or click here. Next update in the next 120 mins.


Penny Coin and BTC Overnight Update Five


BTC 5min chart: 5/10 00:10 UTC

BTC tends to have three segments each time it has an RSI divergence in which price makes 3 consecutive lower lows and the RSI continues to make higher lows. This happens quite often on lower time frames, and knowing this means you can predict when a larger move downward can be expected, giving a good cheap entry for the following move up. Given the size of this most recent third leg, I'd say that's the last time sellers will attemp to short the market, as buyers clearly regain control. ADA has also just dropped below 0.05200, for a great entry on the way back up to 0.05500 which we will likely see overnight tonight.
Next update coming in 120-240 mins.

Penny Coin and BTC Crash-New Levels


BTC 5min chart: 5/10 1:30 UTC

Wow that was a violent candle. Completley invalidated the previous levels we were looking at. Honestly this doesn't look like an organic drop, more like a coordinated one as the price dropped over 1k in 10 mins after no significant moves prior. In fact technically, with the bullish RSI divergence, it was supposed to be a move of similiar size in the opposite direction. Likely next step is another drop to 8400 before buyers can gain crontrol again.


ADA 5min chart: 5/10 1:30 UTC

As for ADA, if you were lucky enough to be on an exchange that didn't crash, you just got a great buying opportunity at 0.04199. If BTC pulls back to 8400 ADA will have an impulsive drawback to the 0.04390 level.




I am going to call and end to this and post a review tomorrow, Monday May 11, along with an article about the crytptoeconomic reason behind the halving.

There will be a section for more like this one in the near future. Those will likerly be shorter. Thanks for following along.