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Daily divergences and Keltner channels
🕑 Added 2021-08-22 14:08:49 +0000 UTCTwo indicators telling us to be a bit more cautious.
Keltner Channels
Keltner channel served as a strong level of support throughout the whole bull market. From September to April its lower daily band was respected each and every single time.
We were assuming we were going to remain bullish as long as we respected it. Many other indicators served as for the same purpose but I was really impressed how Keltner channel was so precise as a level of support.
How has it been in the past month since we have been flipping to a bullish sentiment? We haven't yet paid a single visit to the lower band. That for me is something to consider, particularly each time we are getting far off from it's upper band, as the fall can be of up to 30 to 40%. Those are the instances when risky bots get caught. Today we are far away from the upper band and also confronting the 50K psychological resistance level, which is also the fib 0.5 level from top to bottom, a dangerous level that many bears would love to turn into a big dead cat bounce and dump us to below 30K.
I'm not bearish but I'm respectful of these risks and I personally prefer to get over the 50K or see the price do a decent cool off which is by the way not happening. We have stayed all Saturday and Friday just right below this dangerous level without doing much. Volatility is decreasing. And you know what silence in a market means: something big about to happen.
We could well pump straight to ATH from here, or we could fail to pass the 50K and make a 20 to 30 dump just to delay the ATH for a few extra weeks. Either way my plan is to see resolution of the event to decide what's next for me.
Keltner channels look very similar to bollinger bands but they use volatility to calculate the width of the bands rather than standar deviation, which makes the bands much more reactive to the volume in the market, perfect for BTC. As you can see below the price has not touch even once the lower band in a month. Check on the left of the chart the 4 consecutive ATH levels. Each one corrected in order 30% 27% 19% 29%, they did this after pumping up to 100% so yes, there is definitely still room for more bullish moves but in the back of your head remember that that is only:
1) delaying the unavoidable correction
2) making the upcoming correction larger and more difficult to manage
RSI daily divergences
During the whole previous bull market we also saw plenty of daily divergencesfrom RSI right or very close to any of the big dumps. We are currently starting to accumulate many which is constantly reminding us that are are due for a correction.
Corrections are healthy and as you become more advance and have more time getting to know the personality of BTC you will start to thank corrections: they release the dangerous pressure from a pan that can otherwise blow in your face.
Risky bots have a more tough time recovering from big corrections because they are meant to be run when prices are going up and within certain range of drop based on their max deviation.
Get to learn from the dashboard which risk have the bots you are running and the distribution of your funds.
Are you giving too much funds to risky bots? Do you have a plan if the market corrects as in for adding funds, or anything necessary?
Comments
If we cross and confirm 50 as support I’ll switch back on venka, bebek and potentially some riskier bots
Thank you for your analysis. Well thought out as usual. What bots do you recommend running now, in preparation for a possible bearish scenario?
