Image: Bitcoin (BTC) Point & Figure Chart
Identifying key breakout and re-entry buy signals is done utilizing Point & Figure analysis.
Bitcoin (BTC)
Bitcoin (BTC) has finally entered into a condition where it is no longer trading in a bear market. When Bitcoin made it’s prior major swing high back in June 2019, it then sold off lower and moved below the uptrend angle to establish a new bear market (A). After a little over three months of trading in a bear market, Bitcoin returned to a bullish position by breaking the bear trend line when it reached the 9000 value area (B.). Bitcoin is now trading in a new bull trend with support below the current column of Os at 7800. Traders see a series of continued minor rallies on Bitcoin’s chart followed by some standard pullbacks. In Point & Figure analysis, entries are unambiguous and easy to spot because entries are only (unless it is a spike or pole pattern) taken when a multiple top or bottom brakes. The buy signal for Bitcoin occurs when Bitcoin breaks a double-top at 9000 for an entry above at 9200
Buy Signal @ $9200
Ethereum (ETH)
Ethereum (ETH) Point & Figure Chart
Ethereum’s (ETH) chart clearly shows its underperformance against Bitcoin. If we compare Bitcoin and Ethereum against one another, Ethereum is hands down the weakest looking chart. And in many ways, Ethereum’s chart shows how investors and speculators feel about the aggregate altcoin market versus Bitcoin. While Ethereum’s chart is clearly on the bearish side of the market, there does exist a future condition that could change the outlook of this chart very quickly. I’ve identified the $200 value area as the buy signal zone on Ethereum’s chart for two reasons. First, an entry at 200 would be a break of a triple top formed at 190. Triple tops are by far the most profitable multiple top or bottom pattern in Point & Figure analysis. You might be wondering why a buy signal would generate at 200 when the entry occurs below the bear trend angle. That brings me to my second reason. Because triple tops are so powerful, the fact that the entry would occur just one box below the break of the bear trend angle suggests traders would move Ethereum up and above that trendline with little effort. It has been my experience that any entry of a triple bottom or top when that entry occurs withing one box of a trendline, you will often see prices rally through those trendlines.
Buy Signal @ $200
Litecoin (LTC)
Litecoin (LTC) Point & Figure Chart
If Litecoin (LTC) continues to trade in swings that are significantly larger than what we’ve experienced in the past two years, I may have to change the current $1 box size on its Point & Figure chart. Out of the three charts we are looking at today, Litecoin is by far the most active. Bitcoin has transitioned to a bull market and Ethereum has remained in a bear market. Litecoin has transitioned to a bull market, then a bear market, and is set up to return to a bull market. The current chart for Litecoin has one of my favorite buy signal setups: break of a multiple top/bottom after changing trends. When Litecoin returns to the 59 value area, it will create a double-top as well as switch Litecoin into a bull market. The buy signal is above the double-top at the psychologically important value of 60. We should see Litecoin rally towards the $80 value area with some speed behind it when the entry occurs.
Buy Signal @ $60
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