You might not have heard about Point and Figure Chart type of analysis before, but it’s really simple and efficient. The main purpose of these charts is to filter out all the unnecessary information and get a clear idea about the trend.
Point and Figure Chart is a charting technique used in technical analysis. Point and figure charting does not plot price against time as time-based charts do. Instead it plots price against changes in direction by plotting a column of Xs as the price rises and a column of Os as the price falls.
So here’s the current point and figure chart for Bitcoin –
We have entered into a column of 7 X’s, finding some resistance at the top of our previous column. In normal circumstances, I would say that we are likely to range here between 6901-7473, and eventually touch down below 6833, where our 50% retrace of our last unresolved column of X’s is. But our circumstances aren’t normal, they are incredibly bullish. So I wouldn’t advise anyone to short this.
A lot of resistance at 7440, plus daily level at 7456, and that long term linear resistance around 7475. So this is a perfect time to pull back around here. Again, I wouldn’t recommend shorting this.
New to trading? Checkout the basics of Technical Analysis here.