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What must happen that Bitcoin drops in price hard and return to previous lows? What conditions must be fulfilled that Bitcoin price retrace?

I have some very interesting charts to show you today. In this video, I'm gonna explain to you what this means in a few moments. First of all though, let me just do a quick recap. As you probably seen in the last few days, there's been a tremendous amount of volatility in bitcoin and bitcoin prices actually have dropped quite significantly down to some key levels. In fact, we're down now to the 21 daily average. In fact, right now you can see the bitcoin prices dropped from 5,000 just near 5,600 down now to the uh, to 21 daily average, although just a few days ago. As a matter of fact, uh, there were down as low as 5,000. So the question everybody's asking right now is, okay, has this changed a picture on Bitcoin? What's happening right now? Uh, what, what could this chart potentially mean here? Okay, I want to bring you to this chart that I'm showing to you here on empty for now.

 

The reason I'm looking at this chart and mt four is because two reasons. Firstly, it's because this chart excludes, we can data. So sometimes you see a different dimension. As I'm sure explained to you before in previous videos is quite a useful chart. But also because I'm showing on this chart something you probably won't see on trading view or other charts. I have here an indicator that I mentioned before. This is the Delta Vortex indicator you see down here. Now the Delta Vortex indicator is a very interesting indicator that was designed by my good friend Simon, who was a mathematician and Simon used his knowledge of mathematics to put this indicator together and it's a very interesting signal we seeing here on bitcoin right now. Uh, so what you're seeing here is an orange signal. Just in the last few days it had an orange warning signal and now followed by confirmation bearish signal confirmation cell signal.

I'll explain to you what this potentially means in a few moments, but for those of you who are not familiar with this indicator, I have explained this before in a previous video as you'll see here. So I made a video before I went through with in a lot of detail, you've probably seen that video already, but just to let you know, um, often what happens to the delta vortex, you see a, for example, orange signal, the orange.is just a warning, but when it's followed by the red, the red signal, that's a confirmation it's signal and usually the red.is followed by some kind of selloff in the market in this, in this situation, as you see here. Uh, the first one actually was a false signal. It's the second one that should be resulted in a much bigger drop. I'll explain to you what this actually means as well.

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So what do we have right now on bitcoin? Let's take a look. Here is a daily chart of bitcoin on Mt. Four. Now, something very interesting has happened, so about a week ago or so, about a couple of weeks ago, uh, we did have an orange warning signal. It was followed by the red confirmation signal. However, this ended up being a false signal. It's considered bitcoin continued to move higher as you see here. But look at this right now. We had a second orange warning signal and now on Friday, yesterday, in fact, we had a red confirmation bearish signal and there was a confirmation cell signal. Now let me explain to you the significance of this. So what I've found through some research on this, let me just go back here. Uh, something very interesting I found out about this, which is that statistically when there's an orange warning signal followed by the red signal, the red cell signal don't bear signal.

If that first signal does not work out, usually the second or the third signals, usually they do work out. Now, there's no a hundred percent certainty about that. This is all based on probabilities, but the probability increases when there's a second and a third signal. You can see here the second or third signal was much more stronger. Here's an example for you. This is from February of last year. Take a look and you'll see something very interesting. We have an orange warning signal followed by the red confirmation bearish signal. Okay? Now the first one you can see it didn't do much at all. In fact, uh, yeah, this one was a false signal, but look what happened soon afterwards. There was a second one. All right, and the second one actually was the one that brought down bitcoin. Okay, that's a second confirmation cell signal or the bear signal right there.

Let me share another one. Let's just go forward a little bit. Okay, here it is. This is the second example I want to show you here. So again, this is from April of last year. So almost about a year ago we had warning signal followed by the red confirmation signal. Now the first one, in fact, the first couple here ended up being a false signal. But look at this. Another one and orange warning signal followed by the red. This second one was the one that actually brought down bitcoin. I can see bitcoin dropped quite significantly. So what I've found is that statistically it seems that when these signals happen in a cluster, okay, so what I'm looking for is a clustering effect. When you see one signal happening, if the first one does not work out, usually the second or the third, when they happen in a cluster, they have a much higher probability.

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I've called this now the aftershock, so I call it a second or the third signal, the aftershock, the Delta vortex aftershock. So in other words, when the first signal does not work out, as you can see here, when that first one didn't quite work out was a false signal, the second one becomes the aftershock. All right, so let's just go to the charts right now on bitcoin. So you can see here the first signal followed by the red signal that did not work out. That ended up being a false signal. But we have now a cluster just like before a cluster a. In other words, we have a signal happening very close to one another and orange followed by a red, which means now the conditions are right that perhaps this second one, maybe the aftershock it. This may be the more stronger potent signal on the Delta Vortex that may end up in a selloff in the price of bitcoin.

Now, I do want to urge caution here because this could yet again be a false signal. There's no guarantees, there's no certainties in the market. So as I'm sure most of you know by now, there is no such thing as a holy grail indicator or method in the markets. All right? It's based on probabilities. So what this is showing to us is right now given the fact that we have a second red confirmation signal followed by a warning immediately after one that did not work out, we could argue that this second signal on the Delta Vortex has a higher probability and the first one, in other words, the aftershock, one thing I want to mention here by the way, is that despite the fact that we have a Delta Vortex, a bearish signal, the red signal, this signal only remains valid as long as we remain below the highs we made last week, the lows, the highs of about 56 30 alright guys, which means that if, if bitcoin goes above that level, then this signal gets canceled and gets negated.

All right guys. So this signal on the Delta Vortex only remains valid as long as bitcoin remains below 56 30. If it goes above that level, then the signal gets canceled and negate it. And by the way, apart from the Delta Vortex bearish signal, we also have something else over here that's the bearish divergence signal. Uh, this is actually my own lt pro divergence indicator here on uh, on Mt. Four, we have a bearish divergence on bitcoin. So this typically means that the force of this upward move is potentially weakening. And that's not old by the way. Something else I'm seeing here, which is that bitcoin closed on Friday below the 200 daily moving average. The Green Line, you see right there, there is one more thing I want to mention here. Does SD far more important? Take a look at this is the weekly timeframe charts off bitcoin. Now on this weekly chart, take a look what's happened here.

Bitcoin has hit the 50 simple moving average. Just the black line you see here on my chart, that's quite an, it's, that's quite a significant level on the markets. And bitcoin has got rejected by the looks of it. You can see Bitcoin, Canada, 50 simple moving average and got rejected from that level as closed below that level. Now you're probably thinking is that significant? Yes, it is. Why? Because take a look at this. This is the year 2015 in bitcoin after the last bear market in bitcoin which dropped. It can see significantly in 2014 and then bitcoin made a low here in 2015 look what happened. Bitcoin then tried to make an attempt to go above the 50 moving average on the weekly timeframe. Okay, there it is. The black line you see right there. So bitcoin tried to make a move above the 50 moving average on the weekly time frame and it failed.

As you can see right there it came, it came to that level and dropped from that level quite significantly. So it seems that statistically after a major drop or a bear market, when bitcoin twice to make a move above the 50 moving average and the weekly timeframe, it usually fails from that level. And that could be the case here. Right now on Bitcoin, you can see bitcoin rallying to the 50 moving average and the weekly time frame could not get above it and it's actually now closed below that level. So it's got rejected from the 50 moving average on the weekly time frame. And by the way, we also have a warning signal on the Delta Vortex. On the weekly timeframe, there is no red signal, but there is an orange warning signal, which is quite interesting. So what could all this potentially mean for Bitcoin? Well, when you put everything together, you know you have the bear signal on the Delta Vortex, you have bearish divergence as you can see her on bitcoin.

The fact that bitcoin has closed below the 200 moving average on this chart, and the fact that the higher time frames, the higher time frames on the weekly time frame has got rejected from the 50 simple moving average there. Therefore, I would argue the conditions are ripe right now for further sell off in the price of bitcoin tours, the 4,000 to 4,500 levels here. All right, so in other words, the probabilities have increased for a move on bitcoin in the next few days or potentially the next couple of weeks towards the 4,000 levels here on Bitcoin, you guys, which means if that happens, then the likelihood, let me show you this chart. That means if that happens, then the conditions and the probabilities have increased that we have likely made a way for or wave see top in the price of bitcoin just last week, which means this opens the door for a likely move towards 4,000 and maybe even down to the levels of 3000 if we take out 4,000 then luckily we could go down to the 3000 levels as well.

But here's the thing guys, I want to urge some caution here because bitcoin has not yet closed below the 21 daily average. It's still holding above that level. If I just go on the charts and trading view here, take a look and you'll see bitcoin has not yet closed below the 21 daily average is holding that level. He's hugging that level. So I don't want anyone to become overconfident and to think that yes, we're definitely moving lower. No, there is no certainty. And there there are no guarantees. The probabilities of increased, yes, but because bitcoin is still holding above the 21 daily moving average, the Blue Line you see right there, I want to urge a lot of caution here. All right, so let's not get overconfident here. As long as Bitcoin holds above the 21 daily average, the probabilities that bitcoin is going to drop still remains below 70% in other words, it's not going above 70% it's probably between, I would say between 60 to 70% but before we can have more confidence, that price of bitcoin could drop for the lower.

I would like to see this 21 daily average being taken out, and so far we have not taken it out. All right guys, so I want to urge a lot of caution here. Let's not get cocky or overconfident. That price of Bitcoin has to definitely fall. Now know the probabilities have increased. But again, first of all, I would like to see bitcoin closing below the 21 daily moving average, and so far it has not yet done that. Once bitcoin takes out and closes below the 21 daily moving average, then the probabilities can increase our guy, especially when we take out of these previous lows here as well. All right guys, but certainly things are looking good, but it's just a matter of being patient and seeing how bitcoin plays us out. All right, guys, hope this video helps and if it has, please give it a thumbs up and also please subscribe for future updates.

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