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1.Analysis of bitcoin futures volumes from the Chicago Futures Exchange (CME)

2. Analysis of the long-term trend

3. Analysis of the medium-term trend

4. Short-term trend analysis

5. Japanese candle analysis

6. Conclusions

7. Statistics

1. Analysis of bitcoin futures volumes from the Chicago Futures Exchange (CME).

The analysis uses data on horizontal volumes from the Chicago Futures Exchange on daily charts. The analysis is based on the Footprint Profile Theory, in which the movement of the maximum volume level for the day can indicate the likely direction of the trend. The maximum volume level is the level at which the maximum number of transactions was made, that is, the level of a large player. Accordingly, the upward movement of the maximum volume levels indicates an upward trend. Moving the maximum volume level down indicates a downward trend. The chaotic movement of the maximum volume levels indicates a flat in the market.

02/02/21 – Maximum horizontal Volume Level (ROS-Point Of Control) – 34580

02/03/21 – Maximum Horizontal Volume Level (ROS-Point Of Control) – 36990

The ROS moved up, the price reaction after the infusion of this volume went up. There is a possibility that the upward movement will continue.

2. Analysis of the long-term trend.

A trend is a trader’s friend. Many traders know this saying, but do not know how to use it. The answer is simple: trade only in the direction of the trend. This way your trades will have more profit potential with less risk. According to the Classical Dow Theory, there are three main trends:

  • the long-term
  • the medium-term
  • the short-term

All these trends are needed to be analyzed before opening any transaction. We will do this in this analysis.

The long-term trend in this analysis is the daily trend. Trades will be made on a daily time frame and will be held for several days. The daily trend is analyzed using the EMA (48), an exponential moving average with a period of 48. If the daily candle will close above the EMA (48), then we have an uptrend and we should buy. If the daily candle will close below the EMA (48), it means that the trend is down and we should sell.

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The chart clearly shows an upward trend. The price is higher than the EMA (48), so in this situation, you should only consider purchases.

3. Analysis of the medium-term trend.

In this analysis, the medium-term trend will be the trend on the 4-hour chart (H4). The EMA (48), an exponential moving average with a period of 48, will also be used for the analysis. If the H4 candle will close above the EMA (48), then the trend is upward and you should buy. If the H4 candle will close below the EMA (48), it means that the trend is downward and should be sold.

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The price is confidently holding above the EMA (48). This means that the medium-term trend is upward and coincides with the long-term trend, so you should buy.

4. Short-term trend analysis.

The short-term trend which can show the entry point to the market will be considered a trend on the H1 timeframe. The EMA (48), an exponential moving average with a period of 48 will help us. If the H1 candle will close above the EMA (48), then the trend is upward and you should buy. If the H1 candle closed below the EMA (48), then the trend is downward and you should sell.

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The price is above the EMA (48). Strong uptrend, long-term, medium-term and short-term trends are the same, you should buy.

5. Japanese Candle Analysis.

The classic Japanese Candlestick Analysis is used for the daily timeframe. In this analysis, we will also analyze the daily candle.

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The material has been provided by InstaForex Company – www.instaforex.com

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