The following video is a Bitcoin technical analysis update for 17 August, but, moreso, it can teach traders about an important principle to be on the lookout for signs that support or hinder your directional trade plan. The original trade plan was discussed and monitored in the past 3 days here: Bitcoin technical analysis, bulls might be giving up soon, and the updated BTCUSD technical analysis video from today, 17 August, is presented below:
- In this case on the daily timeframe for BTCUSD, we had 3 days of price pullback, on 14-16 August. Following, on 17 August, a day that is not closed yet, the high of the candle is higher than the open (not the high) of yesterday’s open. As such, the low of the 3 day pullback, came quite close to the important 20 day EMA, but did not touch it. Bitcoin reached a 3 day low of $23668 (the low of 16 Aug) and the 20 EMA was at $23512 on that day, only 0.66% below the price
- As shown in the video, this is not the first touch of the price on the 20 EMA. Previous pullbacks did reach it and crossed it down. This makes this occurrence of a pullback that did not touch the EMA20 (as expected), significant. Otherwise, we would not be adjusting our trade yet.
- In short, this pullback should have reached an important price magnet, as it did before, and the fact that it did not do so, yet, supports that there are eager bulls ready to buy beforehand. Or there might be some early short covering or institutional sellers that are not allowing short sellers to get to that popular price target because they want to shake them out. Whatever the reason may be, there is a technical sign here that is sheds more doubt on our short trade