Bitcoin, buy the pullbacks
My post back on March 15th indicated that would see a strong move towards a trend change happening between then and the 21st. That started over the weekend and is now continuing today. The setup we saw today was a textbook example of a bullish pennant.
1. This shaded triangular area represents what’s called a bullish pennant. A bullish pennant is a pattern that looks like… well a pennant. What it indicates is a consolidation zone/period that generally precedes another bullish increase in price. That is the exact scenario we saw play out today.
2. Where we are with price is a great position. We sitting right around 9000 value area and we should expect to see some small resistance to get to above 9000.
The Ichimoku system is showing us all the right buying conditions: price is above the cloud, the Conversion Line is Above the Base Line, the Lagging Span is above the cloud and is above the candlesticks. So where do we buy on a pullback? We have a couple scenarios, but the most probably and likely is re-enter on a pullback to the Base Line (red moving average). The reason for this is because the Base Line is almost like an oversold/overbought indicator. While there is no specific measurement or ratio, the farther price gets from the Base Line, the more it will want to snap back. Think of a rubber-band – the more you stretch it, the more powerful the snap back. The same applies with the relative position of price and the Base Line. Alternatively, we could buy on a pullback to the top of the cloud. Because the cloud is such a thick cloud, there is a strong probability of the cloud acting as a strong support area.