Bitcoin Trendline Break

After bitcoin price has moved in a certain direction for an extended period of time within a channel it reaches a point where it stops moving within the channel. When this happens we say that the bitcoin trend line has been broken.

Since the line is point of support or resistance then we expect the btcusd trading market to move toward the opposite direction. When this happens traders will close the cryptocurrency orders which they had bought or sold. This is referred to as taking profit.

Up Bitcoin trend Reversal

When bitcoin trading price breaks-out upwards line (support) the btcusd trading market will then move down

This signal is considered to be complete with the creation of lower high or lower low. This also provides a trading opportunity to go short once it's broken.

Down Bitcoin trend Reversal

When bitcoin trading price breaks-out downward line (resistance) the btcusd trading market will then move up

Downward Channel break

This trading signal is considered to be complete with creation of a higher low or higher high. This also provides a trading opportunity to go long once it's broken.

NB: Sometimes when bitcoin trading price breaks its bitcoin trend it might first of all consolidate before moving in the opposite direction. Either way it is always good to take profit when the btcusd trading market direction reverses.

To trade this cryptocurrency trading setup as a trader once you open a new trade in direction of the bitcoin trend reversal the bitcoin trading price should immediately move in that direction, in a bitcoin price breakout manner. This means that the btcusd market should immediately move in that direction without much of a resistance.

If on the other hand the btcusd trading market does not immediately move in direction of the bitcoin trading price breakout then it is best to close out the trade because it means that the bitcoin trend is still holding.

Another tip is to wait for the bitcoin trend line to be broken and for the btcusd trading market to close above or below it so as to confirm this bitcoin trade signal.

What happens is that most traders open trades waiting for a reversal even before the bitcoin trend is broken, only for the bitcoin trading price to touch this line and for the current market direction to hold and bitcoin to continue with the current market direction.

Therefore, when trading this cryptocurrency trading setup it is better to wait until the breakout has been confirmed by bitcoin trading price closing above or below the bitcoin trendline, depending on the direction of the market.

• Upward Market Direction Reversal - this cryptocurrency signal is confirmed once the btcusd trading market closes below this upward line, this should be the correct time to open a sell short trade, so as to avoid a bitcoin trading whipsaw.

• Downward Market Direction Reversal - this cryptocurrency signal is confirmed once the btcusd trading market closes above the downward line, this should be the correct time to open a buy long trade, so as to avoid a bitcoin trading whipsaw.

Combining with Double Tops or Double Bottoms Bitcoin Chart Patterns

A good trade setup to combine this cryptocurrency trading setup with is the double tops and double bottoms cryptocurrency chart patterns. Read Double Top and Double Bottom Chart patterns Tutorial.

This setup should already have formed before the bitcoin trend break signal. Because these double tops and double bottoms are also reversal cryptocurrency trading signals, then combining these 2 setups will give the trader a good probability of avoiding a bitcoin trading whipsaw.

In the above chart screenshots these bitcoin trading setups can be confirmed to have formed even before the reversal bitcoin trade signal popped up.

First Example of Upwards Direction Reversal - the Double tops pattern had already formed before the bitcoin trend break signal appeared on the bitcoin chart.

Second Examples of Downwards Direction Reversal - the Double bottoms bitcoin trading pattern had already formed before the bitcoin trend break signal appeared on the bitcoin chart.

Double Top or Double Bottoms Combined with other Reversal Trading Signals