Bitcoin recently produced a major bearish move, the continuation of a bearish trend that started to develop earlier this year. As we arrived at the current market situation, many people are wondering, is this a real or false breakdown?
👉 How to determine if a move is false or real?
There are many ways to do so... Let's have a look.
1) Levels of importance. We can determine if a move is false or real, if it cuts through major support or resistance levels.
Here we can see Bitcoin moving below the 0.382 and 0.5 Fib. retracement levels after almost five months of bearish consolidation.
This would indicate this move being real.
2) Moving averages. If a major move wicks in one direction but ends up closing without conquering/breaking a major moving average, then the move is false. If the major move ends up by closing above (bullish) or below (bearish) a major moving average after the event, it is then considered a real move.
Here we can see Bitcoin closing below several major moving averages after a strong bearish move. Indicating that this is a real breakdown.
3) Volume. If a major move is supported by high volume, it indicates the move is real. Really high volume leaves no doubt as to the validity of the move in question.
Here we are using TradingView's index and it shows the highest volume since 5-March.
4) Continuation. If the move in question is the continuation of an already developing situation, the move can be considered real.
Here we can see a lower highs and lower lows pattern (downtrend) developing, making the last drop a continuation of this pattern.
This indicates that this is a real move.
These are just some of the ways to determine if a market move is real or false.
Informasi dan publikasi tidak dimaksudkan untuk menjadi, dan bukan merupakan saran keuangan, investasi, perdagangan, atau rekomendasi lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Persyaratan Penggunaan.