Downwards Bitcoin Trendlines & Channels
Downward Bitcoin Trend Line MT4 Bitcoin Trend Line Indicator
A downwards bitcoin trend line is plotted above the downward bitcoin trend pattern formed by consecutive lower highs, the downward bitcoin trend line must connect at least two highs, with the recent most high being lower. For our crypto downward bitcoin trend examples we shall use the MT4 technical analysis software cryptocurrency charts to illustrate example of downward cryptocurrency trend.
Since bitcoin price moves downward in a zig zag manner bitcoin traders normally draw a downward bitcoin trendline which shows the general downward direction of the bitcoin prices. In cryptocurrency market technical analysis, this general bitcoin price direction is known as the TREND by cryptocurrency traders. In cryptocurrency trading technical analysis definition we can define this down bitcoin trendline is drawn on Bitcoin chart showing the resistance areas (bearish market direction).
A down bitcoin trend occurs when the bitcoin price forms a series of lower highs & lower lows. Each price high is going to be lower than the previous high - lower high, and each low is lower than the previous low - lower low hence showing bearish bitcoin price movement.
BTCUSD Crypto Down trend lines gain more validity each time bitcoin price touches the down-ward bitcoin trend line but does't penetrate the bitcoin trend line. A down bitcoin trend remains the general direction til this series of lower highs and lower lows is broken.
In cryptocurrency trading technical analysis, An up side penetration of a down bitcoin trend line is a technical buy bitcoin trading signal, and usually the first indication that the bearish direction of bitcoin prices may soon reverse.
Downward Bitcoin Trend Line MT4 Bitcoin Trend Lines Indicator
When it comes to learning how to draw & learning cryptocurrency trading technical analysis of charts, you as a trader need to know that when btcusd market is bearish it forms lower lows & lower highs forming a downward general market direction. These are the points that are used to draw the downward bitcoin trend line.
To draw this downward bitcoin trend setup we use resistances and to do it correctly two resistances are needed. When bitcoin price touches this bitcoin trend line, then we sell and place stop loss just a few pips above the sloping resistances:
Trading This Downward Bitcoin Trend Market Move
When trading using this bitcoin trend line method, this bitcoin trend line setup will show the general direction of the market as downward therefore bitcoin traders only will open short sell cryptocurrency trades. These are the levels where if bitcoin price pulls back then these levels will provide strong resistance. This is why many short sellers will wait til bitcoin price retraces upwards and hits these retracements levels to open sell cryptocurrency trades. Bitcoin trades opened at these levels have a high Risk to Reward Ratio with minimum draw down.
For Example, in the above bitcoin trading example, a trader would have opened short sell bitcoin trading signals at the resistance1, resistance2, resistance3 and these sell cryptocurrency trade transactions would have made a lot of profits with minimum amount of drawdown/retracement.
Downward Bitcoin Channel MT4 Channel Indicator
A downward channel is plotted by plotting a line which's parallel to the downward bitcoin trend line & then adjusting it to touch the bottoms boundary of the bitcoin price movement. This then forms a down-ward channel and as long as the bitcoin price stays between these two channels the general cryptocurrency market direction is intact the btcusd market direction will continue to be being bearish.
Trading the Downwards Cryptocurrency Channel
The downward channel is used by cryptocurrency traders to show levels where it's best to take profits. Traders will book some profit once the bitcoin price touches lower channel & wait for another retracement before opening a short sell bitcoin trade again.
MT4 Tools for Drawing Bitcoin Channels
The bitcoin trading tools to draw these channels studies on the MT4 bitcoin charts are found on the Lines Toolbar within the MT4 platform, to access this Meta Trader 4 tool-bar if it's not activated on your MT4 Bitcoin Platform, Click in "View" Next to "File" at the tops left corner of the MT4 Bitcoin Software & click View, Then Click on Tool Bars, Then Check the Lines Tool Bar by clicking on it.
Shown Below is the screenshot of these MT4 tools: just click on this MT4 channels drawing tool and select the point to where you want to place this channels tool on the bitcoin chart.
MetaTrader 4 Analysis Charts - Downwards Bitcoin Channels
MT4 Toolbar - MT4 Tools for Drawing Bitcoin Trend Lines & Bitcoin Channels used to obtain these bitcoin trendline drawing tools is shown above, to draw these bitcoin trend line setups or channels, just select the above MT4 bitcoin trendline drawing tools shown on the MT4 software and select the two points where you want to draw the downward bitcoin trend line.
This bitcoin trend line bitcoin trading strategy is one of the simplest and popular indicators used by cryptocurrency traders to analyze the btcusd market bitcoin trend direction.
