POWR/BTC Technical Analysis (17 Dec 2017) – Reversal Imminent?

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POWR/BTC is holding the uptrend support despite the BTC bull run from the past two days with the upcoming XBT futures. Those of us that are in the cryptocurrency trading space would recognize that BTC is the leading cryptocurrency asset and when BTC has a bull run the price off altcoins, in general, go down, therefore you should consider this aspect when deciding to take a day trade because it may affect your ROI.

Objective

My primary objective is to teach you, by example, some of the techniques I’m successfully using when day trading. Under my tooling and indicator belt I use tradingview.com when doing my charting, and as indicators, I use: Ichimoku system for uptrends, support/resistance and breakouts is also my main indicator, Bollinger bands for breakouts, fractals for stop loss, Fibonacci for targets, Elliot waves for market cycles and major corrections. I also use harmonic patterns for short-term trades and RSI, RSI Stochastic, MACD, MDI as additional confirmation indicators before taking a trade.

Fundamental analysis

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What is Power Ledger and why you may consider investing? That’s a question I always ask myself before deciding to invest in any cryptocurrency asset.

“Power Ledger provides the ability for energy consumers to participate in a new-energy marketplace, even those who cannot afford expensive upfront commitments in renewable energy generating capacity.”

No other company that uses blockchain technology as of today offers such services, it is certainly unique in the space and has enormous potential for growth in the future once it is adopted on a global scale.

Past performance

POWR is relatively new asset that was launched on 14th of September 2017 into the cryptocurrency market. Despite this short period it outperformed other cryptocurrency assets which have been trading for much longer. What contributed to this performance was the hype created around this asset due to the excellent marketing by the Power Ledger team and community.

Let’s take a look at POWR/BTC on multiple time frames and see what the charts are telling us.

POWR/BTC – Chart 1

The 4-hour chart shows a powerful uptrend movement only four days after the lunch onto Bittrex exchange. After a relative short consolidation period at 0.886 Fib. It hit 9700 satoshis and had a 60% correction to 0.618 Fib, where it got strong support and shot right up to the all-time high of 11800 satoshis.

This is not a surprise and is a healthy retracement of the upswing trend. Three essential uptrend retracements should be considered when calculating profit taking targets: minor retracement at 0.382 Fib and major retracements at 0.5 and 0.618 Fib.

Tip: In an uptrend wait for the correction and always buy on a red candle and sell on a green candle.

POWR/BTC – Chart 2

A downtrend follows every uptrend and quickly enough the profit taking starts. When that happens, the price is suddenly plunging down. How do you know when it will happen? One clue: it comes by looking at the volume indicator which will either be a topic candle (the biggest candle around others), volatility also plays a role, and Bollinger bands can show that. Another clear sign of all time high price is a double top pattern.

After a major bull run, the market is going to claim back 60% – 70% of the all-time high price. In the case of POWR, it claimed 25% which is about 0.381 Fib. You may get confused now because looking at the above chart we can see that the ABC correction wave retraced 100%. Well, that is because of the BTC price, altcoin price doesn’t go up as quickly as BTC price does these days, and we end up with a distorted and ugly chart that sometimes doesn’t make any sense. All-time high price in dollars for one POWR was $0.94, and the correction stopped at $0.53, the market claimed 60% which we would say is a major correction.

Tip: The Fibonacci numbers are support and resistant levels in any trend.

Current performance

The breakout finally happened eight days ago after a long 20 day correction. The volume came back and the bull run started with two failed upswings attempts to break the resistance at 4500 satoshis.

POWR/BTC – Chart 3

On the chart, we can see why the first two attempts failed. In an Ichimoku system the cloud (red or green), Tenka-sen (the red line) and Kijun-sen (green line) acts as support/resistance levels. Sure enough, the price attempted to break the resistance at 4500 and what a surprise Kijun-sen was waiting for a bounce and the uptrend was over.  The price went all the way back to the support line, it had a healthy consolidation and tried to break the resistance again. This time the bulls had to cross a thick red cloud which dilutes their strength, and the trend was over again. A third attempt is currently happening and as we can see the resistance at 4500 still standing by rejecting the bulls once more.

Tip: Ichimoku rule: if the price is

  • above the cloud the trend is bullish
  • below the cloud the trend is bearish
  • in the cloud the trend is in consolidation.

Future performance

What can we expect to happen next with the price of POWR? Is it going to go down or up? Let’s find a possible outcome from the below chart.

POWR/BTC – Chart 4

The red horizontal lines are depicting the resistance levels which unsurprisingly coincide with cloud Senkou span A and B, which are Fibonacci levels. The best chance for the bulls to break off the resistance is to cross the cloud where is the thinnest. The future cloud is finally green which indicates that more bulls are coming in the market (indicated by the increasing volume) and a reversal is about to happen.

Tip: A reversal signal is confirmed when Tenka-sen and Kijun-sen cross over. If Tenka-sen is above Kijun-sen we say is a bullish trend and the opposite is a bearish trend.

Key areas to watch for:

  • the red line resistance as profit taking targets
  • a strong continuation move to the upside tomorrow and break of the resistance at 4500 satoshis
  • Tenka-sen and Kijun-sen crossing over for an uptrend run confirmation
  • Near-term resistance at 5000 and 6100 satoshis
  • Those interested in picking up a position in POWR may consider buying at 4650 and 5150 satoshis after the resistance is broken.
DISCLAIMER: Investing or trading in digital assets, such as those featured here, is extremely speculative and carries substantial risk. This analysis should not be considered investment advice, use it for informational purposes only. Historical performance of the assets discussed is not indicative of future performance. Statements, analysis, and information on blokt and associated or linked sites do not necessarily match the opinion of blokt. This analysis should not be interpreted as advice to buy, sell or hold and should not be taken as an endorsement or recommendation of a particular asset.

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