🔍📉 How to spot the END of a correction? (Don’t get caught out again)
When the market falls, most retail investors panic and sell at a loss. Institutional investors, however, wait for specific signals before buying back in.
If you want to stop being at the mercy of the market, here are 3 objective criteria to watch on your charts (using daily data) to identify a genuine reversal:
1️⃣ Volume capitulation (the “Volume Climax”) 📊
This is the most reliable signal. A downtrend often ends with a very aggressive red candle accompanied by unusually high trading volume (a tall vertical bar on your volume indicator). This means the “weak hands” have panicked and large holders have absorbed all the sell orders.
2️⃣ The rejection wick (the “Pin Bar”) 🕯️
Look at the shape of the candle. If you see the price plunge very low, then quickly rebound and close much higher, leaving a long lower wick, it’s a sign that the buying zone is being defended. Buyers have regained control.
3️⃣ Bullish divergence on the RSI 📈
If Bitcoin’s price makes a lower low than the previous one, but the RSI (Relative Strength Index) makes a higher low, the downtrend is losing steam. Selling pressure is weakening, and a rebound is near.
Investing isn’t about emotions; it’s about probabilities and objective indicators. Wait for confirmation.
💬 What’s your favorite indicator for knowing when to “buy the dip”? Let’s discuss in the comments! 👇
Click Follow 🔔 to learn how to read charts like a pro.
#Crypto #Trading #Bitcoin #TechnicalAnalysis #LearnToTrade
When the market falls, most retail investors panic and sell at a loss. Institutional investors, however, wait for specific signals before buying back in.
If you want to stop being at the mercy of the market, here are 3 objective criteria to watch on your charts (using daily data) to identify a genuine reversal:
1️⃣ Volume capitulation (the “Volume Climax”) 📊
This is the most reliable signal. A downtrend often ends with a very aggressive red candle accompanied by unusually high trading volume (a tall vertical bar on your volume indicator). This means the “weak hands” have panicked and large holders have absorbed all the sell orders.
2️⃣ The rejection wick (the “Pin Bar”) 🕯️
Look at the shape of the candle. If you see the price plunge very low, then quickly rebound and close much higher, leaving a long lower wick, it’s a sign that the buying zone is being defended. Buyers have regained control.
3️⃣ Bullish divergence on the RSI 📈
If Bitcoin’s price makes a lower low than the previous one, but the RSI (Relative Strength Index) makes a higher low, the downtrend is losing steam. Selling pressure is weakening, and a rebound is near.
Investing isn’t about emotions; it’s about probabilities and objective indicators. Wait for confirmation.
💬 What’s your favorite indicator for knowing when to “buy the dip”? Let’s discuss in the comments! 👇
Click Follow 🔔 to learn how to read charts like a pro.
#Crypto #Trading #Bitcoin #TechnicalAnalysis #LearnToTrade