Three bullish candlestick patterns.
The continuation of Bitcoin’s trading range with the bullish pennant continues. If you look at the image above, you’ll see the current weekly candle is a large green candlestick, with a wick approaching 1/3rd of the entire range of the weekly candle. Current, this candlestick remains bullish. But it will require Bitcoin to maintain a level above or at $10,500. What is more interesting about this current weekly candlestick isn’t the price level, but the current range of this weekly candlestick in relation to the two prior weekly candles. There is a three candlestick pattern known as a bullish pivot setup. This is a powerful signal that gives a high probability of the direction price may go. The three candlestick pattern involves the current week and the candles of the most recent two weeks: the week of August 19th and the week of August 26th.
A bullish pivot setup occurs when the middle candlestick (week of August 26th) has a lower high and a lower low than the two outside candlesticks, which is exactly what we presently see on Bitcoin’s weekly chart. There are two other bullish chart patterns that this setup could be called. Some analysts may consider this setup to also be a morning star pattern. A morning star pattern is a bullish reversal signal involving three candlesticks. The second candle should show a continuation south – but the third candle should reverse and close above the second session and, ideally, close above the first candlestick. The second – and most likely – a pattern that we could identify is the mat hold pattern (or the rising three method). This pattern has one of the highest percentage probabilities of turning bullish. According to Bulkowski and Thomsett, this pattern will continue a prior bull move 4 out of 5 times. This pattern is a four-bar pattern where the second and third candlesticks open above the prior candlestick close but then close below the prior candlestick close. The fourth candle then shows a strong bullish reversal, closing above the third candlestick – ideally, we would see it close above both the second and third candle. And if nothing changes between Saturday and Monday afternoon, then we will see this extremely bullish ‘mat hold’ pattern fulfilled.
Given the bullish continuation pattern that Bitcoin continues to trade in, along with the fact it is now within the final 1/3rd of the bullish pennant, there is a high probability we see this market move higher. Not shown is the weekly RSI and %B indicators who are both sloping higher. Another condition not shown is the shared relationship between the %B on the daily and weekly charts. On both the weekly and daily charts, the %B is very, very close to crossing the 0.7 level. A cross of that level is a strong bullish entry signal and given that the RSI is in neutral territory on the daily chart, we could observe a sustained breakout higher that lasts for over 60 trading days.
Save money on your currency transfers with TorFX, voted International Money Transfer Provider of the Year 2016, 2017 and 2018. Their goal is to connect clients with ultra competitive exchange rates and a uniquely dedicated service whether they choose to trade online or over the telephone. Find out more here.
After graduating with a 1st in psychology (BSc Hons), Elaine specialised in the areas of trader psychology...
Three bullish candlestick patterns.
The continuation of Bitcoin’s trading range […]
Futures exchange operator CME group has announced that it plans to begin offering bitcoin futures contracts starting in early 2020.… Read More
After briefly incurring a significant influx of buying pressure, Bitcoin (BTC) has once again lost its momentum and is now… Read More
The traditional investment world has largely found itself split on whether or not Bitcoin and other cryptocurrencies constitute sounds investments,… Read More
Another week, another of Crypto Tidbits . While Bitcoin (BTC) effectively ended the week where it started in terms of… Read More
It's possible to pay your bills with money earned from the cryptocurrency market. Everyone can generate additional income, or even… Read More