"Jack's Trading Classroom: BTCUSD consolidation nearing its end, watch out for reversal risks"

Original Jack's trading classroom "Bitcoin's Convergence Pattern and Ethereum's Potential Head and Shoulders"

In the market analysis article "Convergent Pattern after the Failure of BTCUSD Trend" on July 11, 2020, we mentioned, "You can see the continuous rise of the bottom low points forming an upward support trendline in the chart, transitioning into a medium-term three-small convergent pattern, judging the market to remain in a consolidation phase."

Currently, we see the four-hour candlestick chart of BTCUSD, and our view remains the same as in the previous article, where the convergent pattern has not yet broken through the upward and downward trendlines. In the short-term smaller cycle, it presents a downward trend of oscillation.

The current price at the bottom is close to the upward pressure trendline of the convergent pattern. Therefore, based on the current pattern judgment, the entry point for short positions in the short term is less reasonable.
For traders who prefer to operate in a bearish market, they should also wait for the breakthrough of the bottom triangle closing trendline before entering. It is better to enter short positions after the trendline breakthrough.

Bullish traders maintain the same view as in the previous article, entering after breaking through the upper resistance trendline. The daily resistance level at 9419.0 is still a price level we need to pay special attention to. Looking at the indicators, we observe the EMA (Exponential Moving Average) moving averages. In the daily chart, EMA15 is about to cross EMA50. Combined with the convergent pattern analysis, we judge that the consolidation phase is coming to an end, and there will be a significant volatility in the coming days.

Upper resistance levels:
R1 9138.5
R2 9278.0
R3 9419.0 (Important long-term support and resistance level to watch)
R4 9648.0
R5 9782.0
R6 10124.0

Lower support levels:
S1 8862.0
S2 8089.0

In recent days, the digital currency market has experienced significant fluctuations. It is recommended that operators strictly follow risk management and avoid high leverage and high contract volume operations to prevent additional losses caused by volatile market conditions. This article is for personal commentary. Readers are advised to refer carefully, as cryptocurrency trading may involve risks to your capital.

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Personal website: jackbtc.io