In the short term, Furus continues to change from bullish to bearish week by day, day by day. People often ask why we are not shorting the market, and this was initially defined by the strategy we determined earlier. No different from a “long-term” fund that trades in only one way.
One reason investors like “long-term” funds is that they trade the market based on broader trends. Yes, it’s important to understand that trends are very different from momentum.
To discover broader trends, we look at the structure of short-term trends and determine whether the market is bullish or bearish. Quite simply, on the monthly chart above, it is clear that we have a longer-term bullish trend.
After breaking down the trend, we experienced a series of bullish volatility and then consolidated it. I’m talking about integration and trends because we are working on time frames. This is the market structure, which is clearly bullish in the long run. Can we enter a broader bearish trend now? Of course it can, but it takes some skill to change our position.
Note that the market has cycled a lot in a two-year cycle, with a two-year bull market followed by a two-year bearish or consolidation period. But the structure (blue) is higher and lower in the market cycle. Looking again at the period (time period), structure and price, there is no doubt that we will have a series of higher highs and higher lows.
Even if the proportions of the swings are equal, as in the EW theory, the fourth wave is usually proportional to the second wave. Therefore, we also have some proportions in structure. All of this shows the order flow, which is bullish in the long run.
So in the short run, are we trending or are we just part of the bearish momentum and consolidation? The answer is that we might merge.
In the short term, evidence of continued bullish trend is clear. The one-year merger dating back to 2018 has a very broad and well-defined correction structure. We are also in an extensive correction structure, and in order to tilt the probability scale which is part of a very extensive correction (WXY), we need to see the low point of the previous structure ($ 6,000 for rounding)).
To tilt this is a scale of probability in the broader bullish pulse wave (blue 1, 2), we need to see that the 15,000 level has been eliminated. In short, we’re really not sure, or the evidence is evolving, whether this is part of the wider Wave 5 or part of the Wave 4 correction. However, we do have some levels that increase the probability of one or the other, but we have not eliminated either.
Therefore, common sense brings us back to the overall bullish trend, which we consider to be part of a broader revision of speculation, and at this time there is simply not enough evidence to make this assumption.
Looking at the short-term time frame (daily candles), we have a series of merged structures. The current structure does not eliminate the low point (blue) of the previous structure, but a wider scale structure (magenta).
If rounded, the critical level here is approximately 6890 or 6800. The structure indicates the current market sentiment or cycle. The bullish cycle is followed by bearish cycles in different time frames. The key is to look at the proportion of the structure to provide information on whether this is a series of higher highs or lows or a series of lower lows and highs. opinion.
Time is the basis of this subjective perspective. Notice how we determine the merge weight based on the time element or correction length. This is where many EW novices go wrong. In orange, I marked the valid wave number, which will allow us to complete the short-term 5 wave fractal, but the proportion of the structure does not actually exist.
This is likely to be the 4th wave mid-cycle (shown in dark blue), and it is not uncommon for the shorter fractal wave (v) to retract into the shorter fractal wave (iv). Since we have completed several fractal pulse swings, the wider fractals are more complex and are usually (but not always) drawn in time.
The combined proportions allow Bitcoin to complete the fractal cycle of Wave 4 as part of Wave 1 or Wave 3. Yes, it is confusing, but please review the corrected structure and scale metrics.
Currently, the fourth wave is equal to the second wave, which is usually the lowest point in the transition time range. The correction part of the fractal cycle (from (i) to (v), back to (iv)) In short, based on short-term and generalized structure, we have a lot of evidence that we are still in an overall annual bullish trend.
So why are so many people calling this a bearish cycle? Well, it depends on your time frame.
Many may think of this as “a bullish trend over a smaller time frame, and on a 4-hour chart, the structure may indicate this. But even within this time frame, this bearish momentum is still a bearish trend.
There is some confusion here, you can see that the current structure is lower than the first two merged structures (shown in magenta). However, the wider structure (blue) does not eliminate the low point of the previous structure that is proportionally related to it. Is right “proportionally proportional”
Consolidation in the short-term time range is only relevant for proportional-based time ranges. Therefore, in terms of the larger structure, the current price trend is not a bearish trend, but a bearish momentum. In simple terms, we made a series of short-term mergers that have taken lows, but the overall merger has not eliminated the previous lows in proportion.
So this is not the bearish trend of the IMO, but the bearish momentum in the broader integration of the broader bullish trend. The 4-hour chart is more relevant to day trading because you trade momentum in a shorter time frame. I can break it down into shorter time frames or fractal structures where 5 minutes may be bullish momentum and 30 minutes are bearish. Do not confuse momentum with trends.
Obviously, on weekly and monthly charts, and even on daily charts, the trends are bullish. Therefore, if you are trading on a swing, you want to trade with trends. Since our strategy is based on weekly and daily charts, this is the time frame we are focusing on.
But what about essentially empty mergers? As we have mentioned many times, transaction consolidation is tricky because price action is more random. Even if your premises are correct, this increases the possibility of being eliminated from the trade. The reason is that your trading is against the megatrend.
In the long term, we are still bullish as the structure suggests a broader bullish trend unless we start to see broader consolidation lows (such as the 6000 level). Technically, the low is around 3200, but either way, we stick to the trend until the evidence provides a reason for the change.
Why not short this market? On the one hand, it is not as liquid as IWM, SPY or QQQ. As a rule of thumb, trading against a trend in “illiquid” markets or stocks can be painful. The bid / ask spread is large, and it is very likely that a slippage will begin. Conversely, it is risky to start trading in a broader trend. Especially things like Bitcoin can move 5-10% in one day.
Perform a mathematical operation with a leverage of 50/1, and close the position by moving 2%. Bitcoin can do this in a matter of minutes, in which case things like IWM rarely rise more than 2% in a day. Because the market is extremely liquid, there is little chance that it will be removed not only when and where. Many rich short sellers with months of experience are learning their course to short Tesla. Oh, this is a painful short film.
A short-term (daily) break above the 8550 level will be a bullish long-term trigger. If this is the case, we expect the next wave to enter the upper-middle region of 9000. If we withdraw from the 7600 level, we may see a retest of the 6k mid-low area, but we will continue to look for bulls unless we withdraw the 6000 level.
Understanding order flow and market sentiment is not as easy as determining the graph on the chart. It is bringing trends, structure, proportionality and momentum into view. More importantly, the relevant content is determined based on the time range. Obviously, the long-term market is still bullish, and some people say not to do so, that is, to speculate not to look at the broader market.
I’m really busy so I don’t have time to update on TV because writing an article takes 4 to 5 hours, but I want to provide a point that is often overlooked and misunderstood. Of course, this is my subjective view of the market. It can be accepted or abandoned, but I hope it provides a different perspective and you can make your own rational decisions accordingly.
In the end, this is your money, and then you press the button to buy and sell. Having different perspectives often leads to better decisions.
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0X Simplified Chinese: Bitcoin-Defined Structure-Proportion-Trend and Momentum