Momentum Bitcoin Trends

What is a Momentum Trend?

A momentum bitcoin trend is one that has more momentum than the previous one, it can be drawn using a much steeper bitcoin trend line than the one that was in place before. When a new line forms that's much steeper than a previous one we say that the bitcoin trend has gained extra momentum & becomes much stronger. These types of set-ups require a different type of market technical analysis.

In the cryptocurrency trading example illustrated below: Also when bitcoin trading price is moving upwards within a channel, if it breaks the upward channel a stronger bitcoin trend is formed as shown in the diagram below. If as a trader your chart breaks an upward bitcoin trend line to the upside in an upward moving market like the one below, Do not Try to Sell, Buy More Contracts, Remember this bitcoin trading tip it can make you a lot of money just like the way it did in the trading analysis below.

Channel Break Upward - More Momentum on Upward Market Movement

Using the same technical analysis example above we can also see how new steeper lines were formed showing the bitcoin trend was gaining momentum.

This is shown by the steeper lines that can be drawn as the bitcoin trading price progresses.

The newly formed bitcoin trend has more momentum than the previous one as displayed by the formation of the steeper trend line.

This forms bitcoin trend B and C as shown in the diagram below drawn using the MT4 technical analysis software, The momentum added a new steeper line as plotted on this chart.

This is shown in the cryptocurrency trading example illustrated below by the three lines A, B and C showing formation of stronger trends as the btcusd trading market continues to gather momentum.

Bitcoin Price Gaining More Momentum

However, when the steepest bitcoin trendline is broken then even all the others trend-lines will most likely also be broken too. It is best to take profit once the steep most trend-line is broken.

This strategy can also be used by short term bitcoin traders like the day trader or the scalper, this pattern will frequently form on the 5 minute and 15 min chart. This parabolic lines can be used to know where to take profit. A trader should immediately book his profit as soon as the steep most line is broken.

How to Trade These

The momentum bitcoin trend-lines are good technical analysis tools for determining where to take profit early before other traders. This momentum trading setup occurs frequently on 1 minute, 5 minute and 15 minutes charts and therefore suitable for scalpers and day traders. For day trading which is most common the best chart to use is the 15 minutes sometimes the 5 minutes, for example after entering a short term trade either buy/sell and the btcusd trading market moves some pips in your favor and you spot this pattern then it is best to exit once the steep most line is broken and take profit at that point.

Technical Analysis Examples

For this example we shall use short term trading chart of minutes for plotting, when the set-up appeared as below, it was a good point to take the profit.

Trading the Momentum Market Moves

In the above example a trader trading long would have waited until the steepest line was broken then closed the trade and taking profit at this point thus making a profit of 42 pips on this buy bitcoin trade. Trader would have exited the trade at the best time and thus avoided the ranging cryptocurrency market that followed.

What is it?

Sometimes a market moves in a parabolic manner, and this is seen when panic buying sets in and bitcoin trading prices is driven vertical. During a parabolic up move, there is almost a complete absence of sellers, which creates a vacuum of buying. When this occurs traders rush to just get into the btcusd trading market regardless of bitcoin trading price, in fear of being left behind. This can make the largest bitcoin trading price moves in the shortest amount of time, traders will place buy orders in this bitcoin trading setup.

For this type of move it's best to keep buying - no need for technical analysis just keep buying.

This bitcoin trend will last for months on end even upto 2 years, for this time just keep buying & as long as those weekly & monthly bitcoin trend lines are holding just keep buying and buying.

When bitcoin moves in this way, the highest point that is reached often marks the end of a move with bitcoin trading prices not returning to the ultimate highs again for a long time. When this point is reached and the most steepest bitcoin trend line is broken it is best to consider that as a bitcoin trend reversal and it is best to take time off the btcusd trading market and enjoy your profits for a while before calculating your next move.

The same can also happen for a down bitcoin trend when there is panic selling and bitcoin price is also driven vertical. This especially happens during recession.

The steeper a bitcoin trend line angle, the less reliable it becomes. When the most steep is broken its best to exit this trade. The example illustrated below is for crude oil that has formed a parabolic setup. Another example is bitcoin that formed on the weekly/monthly chart during the period shortly after the steepest line in the crude oil chart was broken.

As a trader if you come across a parabolic bitcoin trend in an upward just keep buying and buying some more you will make a lot of profits, there will be no added technical analysis required just the lines. The only thing to remember is to exit once the steepest line is over because the reversal on this cryptocurrency setup is very fast you need to also be very fast. Just make sure you exit at the correct spot just like in the above example.

For example, the above parabolic movement is of crude oil trading chart, the traders had managed to drive the bitcoin trading price of oil from $70 to $150 over a period of a couple of months at the top of the btcusd trading market those who call themselves analysts were so bullish they predicted the bitcoin trading price of crude oil would hit a high of $200, what these analysts did not know this concept a.k.a Vacuum buying, in technical analysis market trading as long as the bitcoin trend lines held the direction of the market was upward, but even after the first steepest line was broken the analysts kept insisting the bitcoin trading price would hit $200, guess what, after the most steep line was broken it did not even take two weeks to take the bitcoin price of oil, back to $50 at one time it was even $35. That's parabolic technical analysis, now you know.

Good examples of this cryptocurrency trading setup on charts is the weekly and monthly bitcoin trading price charts for Bitcoin and Crude Oil, these charts can be found on MT4 software depending on your broker.