Point & Figure: The Chart That Makes Bitcoin Support Cut And Dry


Is Bitcoin in trouble, doubtlessly on the point of collapsing to sudden new lows? That’s the query on all crypto inventor’s minds, because the main cryptocurrency by market cap tends to guide the bullish cost.

However, a considerably forgotten model of technical evaluation may present probably the most reduce and dry take a look at the present help ranges – “important” help ranges which are absolutely in tact regardless of the massacre to start out December.

Let’s Get Technical: The Origins Of Point & Figure Charting

Before there was TradingView and different pc software-based charting instruments, technical evaluation was totally drawn by hand. Traders would look forward to the bell to ring on the day earlier than including the day by day near their charts.

More than 100 years earlier than Bitcoin was created, an nameless author by the title of “Hoyle” first wrote about a unique sort of hand-drawn chart in 1898, known as the Point & Figure chart. His writings had been featured within the ebook The Game in Wall Street and How to Successfully Play It.

Related Reading | Finding Fibonacci: Is Bitcoin Beginning A “Golden” Recovery?

Point & Figure charts are a collection of columns of Xs and Os. Unlike the the ebook’s title and the comparability to Tic-Tac-Toe, the sort of chart is not any “game.” It is designed to filter out time and noise from value charts, and make ranges of support and resistance considerably simpler to establish.

It additionally places the concentrate on “important” value actions solely. Which is why the chart may make the confusing situation in Bitcoin much more reduce and dry.

Xs and Os make up a Point & Figure chart  | Source: BTCUSD on TradingView.com

Bitcoin Drops To Undeniable Support Level That Bulls Must Hold

The chart above may look uncommon in comparison with the Japanese candlesticks and bar charts most merchants share. Support could be drawn both at 90 levels or at 45 levels for an uptrend. Resistance additionally works equally at 90 and 45 levels.

The present column of purple bars represents the downward value motion, which first touched the blue horizontal help line, pierced the 45 diploma uptrend line, however has since bounced and is presently holding above above it.

Related Reading | Bitcoin “Speculative Chart” Suggests Cryptocurrency To Soon Blast off

Price can also be now holding on the purple line, which may very well be a retest of resistance turned help. An lively purchase sign nonetheless exists stemming from the latest larger excessive of Xs, and a brand new promote sign gained’t generate till two full circles under the blue line, making a decrease low.

BTCUSD_2021-12-08_12-16-21

The similar chart, however with candlesticks as a substitute  | Source: BTCUSD on TradingView.com

According to a Wikipedia entry, “45 degree lines may be used to define up trends and down trends from important highs and lows on the chart allowing objective analysis of trends.”

Switching again to the standard candlestick chart that’s usually shared right here on NewsBTC, the identical horizontal help ranges and 45-degree uptrend line stay. Using the Point & Figure model is immediately extra “objective,” eliminating any attainable private bias from the image.

Related Reading | Bitcoin Falls Flat: Examining A Rare Bull Market Corrective Pattern

Zoomed in additional under, the Point & Figure chart has doubtlessly filtered out the wick to the low $40Ks, highlighted an “important” retest of the 45-degree uptrend line – which is presently holding – and will display a resistance to help flip in motion.

Objectively, a decisive shut of purple circles under the purple line and under the uptrend line would make it very clear that the bull part is over, and extra prolonged draw back is coming.

BTCUSD_2021-12-08_12-20-56

Losing the 45-degree uptrend can be telling  | Source: BTCUSD on TradingView.com

Follow @TonySpilotroBTC on Twitter or be a part of the TonyTradesBTC Telegram for unique day by day market insights and technical evaluation schooling. Please notice: Content is academic and shouldn’t be thought-about funding recommendation.

Featured picture from iStockPhoto, Charts from TradingView.com





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