Jack's Trading Classroom | BTCUSD The second spot entry condition in the daily chart of this bull market

Before starting the article, it is recommended to read our two articles published on September 7th and 15th, 2020, titled "BTCUSD Daily Chart Entry Conditions for Spot" and "BTCUSD Daily Chart Confirmation of Bitcoin's Continued Movement After Pullback," respectively.

In the article published in the past two days, which is over seven months old, when the article was published, the price of Bitcoin was still around 10,000 points. It was also mentioned in the article:

"Currently, the entry point for Bitcoin spot is good in terms of risk-reward ratio, and it can be judged as the first retracement support of the bull market."

Earlier, before dropping below the current price of 50,000 points, the high point of Bitcoin reached 64,990. Based on the entry and stop-loss points at that time, the risk-reward ratio was highest at over 1:64 at the high point as shown in the following image:

Traders who have been following the Bitcoin market over the past few months are aware that since the last excellent spot buying point in September, there has been no daily-level retracement for seven months. Today, we see the daily chart of BTCUSD.

In the daily chart of Bitcoin, it shows a downward trend line breaking the rising wedge pattern, and it has already broken the Fibonacci 61.8 support at 51,176.5 on the chart. This support coincides with the overlap of the 12-hour EMA144 169 moving average support channel at 51,176.5 as shown in the image below:

Therefore, judging by the trend line, after the bottom wedge trend line is broken, there is a high probability of a decline to the starting point of the trend line at 43,017.5, with the low point overlapping at 42,643.0, which is the Fibonacci 38.2 support below. Therefore, it is judged that the area around 42,643-43,017.5 below is the pattern's support level.

Combining with the Vegas Tunnel trading method mentioned in the technical analysis article on spot buying in September last year, the lower moving average support channel EMA144 169 also overlaps with the above support level. The daily EMA144 169 moving average support channel is currently at the price of 41,778-44,252. Note that the moving averages will change over time.

Similarly, as a support level indicator, through cross-analysis judgment, the pattern, structure, and indicators all show overlapping support levels below, with a high probability of forming effective support at this price level. We will also layout based on the spot buying conditions from September last year:

After the price drops to the daily EMA144 169 moving average support channel, wait for a rebound in price. If the daily closing price is higher than the upper EMA12 filter line and the price cannot cross below the channel formed by EMA144, 169, it can be considered as the completion of the retracement. Buy spot with the low point as the stop-loss, and set the lower point as the spot stop-loss level.

If the above spot buying conditions are met on the daily chart, it will be the second spot entry point of this bull market cycle.

Currently, the judgment remains the same as before. Before reaching the highest point of the bull market, there will be several large-scale retracements of 30-40%. If the above buying conditions are met, this time the decline will be around -35.7%.

*Note that this layout is a long-term buying condition layout, not a short strategy. Wishing all traders good luck.

In recent days, the digital currency market has shown large fluctuations. It is recommended that operators strictly implement risk control measures and avoid high leverage and high contract volume operations to prevent additional losses caused by volatile market conditions. This article is for personal reference only. Virtual currency trading may carry risks to your capital.

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