This detailed analysis of the Heiken-Ashi candles and volume on the weekly Bitcoin chart, spanning from 2017 to the present, aims to provide deeper insights into Bitcoin’s price action, trend behavior, and potential future movements.
By examining past price and volume patterns, we seek to help you understand Bitcoin’s various developmental phases, its current market dynamics, and possible future directions. Our goal is to equip you with a clearer perspective on the market, enabling more informed decision-making for future practice trades.
Heiken-Ashi Candle Analysis:
Heiken-Ashi Candles are particularly useful for smoothing out market noise and identifying trends more clearly. Let’s go over key segments of the chart:
1. 2017 Bull Run:
The candles during this phase are large, solid green bars without wicks below the body. This is a hallmark of a strong, continuous uptrend.
Little to no lower wicks suggest consistent buying momentum with minimal pullbacks.
2. 2018 Bear Market:
The Heiken-Ashi candles shift to red with increasingly long upper wicks, signaling the end of the bull run and the beginning of a downtrend.
Many of these red candles have small bodies, indicating indecision, but they progressively get larger as selling pressure intensifies.
Long upper wicks signal that bulls are trying to push the price higher, but the selling pressure dominates.
3. Consolidation (2019-2020):
This phase shows alternating green and red Heiken-Ashi candles, with many candles having both upper and lower wicks.
This kind of pattern indicates indecision in the market, with neither buyers nor sellers taking complete control, consistent with a consolidation phase.
The candles during this period are small in size, which further reinforces the idea of range-bound price action.
4. 2020-2021 Bull Market:
In the 2020–2021 bull market, there is a return to strong green Heiken-Ashi candles, often with no lower wicks.
The absence of lower wicks and the large size of these candles suggest robust upward momentum.
Notice how, for several weeks, the candles have long bodies and minimal upper wicks. This suggests sustained buying pressure without much hesitation.
5. 2021-2022 Downtrend:
As Bitcoin approaches its peak near $70,000, the Heiken-Ashi candles start to show long upper wicks, a signal of weakness and potential reversal.
After the peak, the candles turn red, and we begin to see larger lower wicks. This indicates that while the trend is down, there is still some buying pressure present as bulls attempt to resist the selling.
6. Recent Price Action (2023-2024):
In the most recent phase (2023–2024), the chart shows a mixture of green and red Heiken-Ashi candles, indicating indecision and choppy price action.
Some of the red candles have long upper wicks, which suggests failed attempts to break out higher.
Although there are occasional green candles, they are not as large or strong as those seen during the 2020–2021 bull run. This signals that the market is struggling to gain upward momentum.
Volume Analysis:
Volume is a crucial factor when analyzing trends because it often confirms the strength or weakness of a price move.
1. 2017 Bull Market:
Volume surged alongside Bitcoin’s price, which confirmed the strength of the uptrend. This is a healthy sign during a bull market, where rising prices are supported by rising volume.
2. 2018 Bear Market:
During the 2018 sell-off, volume spiked during significant price drops, confirming that the selling pressure was strong and backed by market participation.
As the price declined, volume eventually tapered off, indicating exhaustion in selling and the beginning of a consolidation phase.
3. 2019-2020 Consolidation:
Volume during the accumulation phase is relatively low, as is typical during sideways or range-bound markets.
This low volume often indicates that major participants (institutions, whales) are neither buying nor selling aggressively, waiting for a better opportunity.
4. 2020-2021 Bull Market:
The 2020–2021 bull run was characterized by increasing volume as prices rose sharply. This increasing volume confirmed the strength of the uptrend.
There were occasional volume spikes during corrections within the larger bull trend, but overall, buying activity was dominant.
5. 2021-2022 Downtrend:
As Bitcoin began to decline from its $70,000 peak, volume initially spiked during the sell-offs, signaling that market participants were exiting positions.
As the price fell further into 2022, volume tapered off. This suggested that the downtrend might be losing momentum, but also indicated a lack of conviction from buyers to drive the price back up.
6. 2023-2024:
The recent price action is marked by decreasing volume, which is concerning because it suggests that neither bulls nor bears are fully committed to a direction.
The lack of strong volume on green Heiken-Ashi candles indicates that the buying pressure is weak, and this is why the price has struggled to break above key resistance levels.
In general, low volume during price increases can be a sign of a weak rally, as it means that the upward moves are not supported by significant market participation.
Summary of Insights:
Heiken-Ashi Candles:
In the past, strong Heiken-Ashi trends (large green candles in uptrends and large red candles in downtrends) confirmed significant price movement. Currently, mixed Heiken-Ashi candles (both green and red, with upper and lower wicks) suggest indecision in the market.
The lack of clear green or red dominance means the market is in a period of uncertainty or consolidation.
Volume:
Volume has been declining, especially compared to the peaks in 2021. This lower volume suggests that market participants are hesitant to commit fully to either a bullish or bearish direction.
The absence of rising volume on the recent price recovery attempts means there is less conviction behind the upward moves, making a breakout less likely in the near term.
Considerations for Bullish Practice Trades in Bitcoin:
Wait for Confirmation: Before making any major decision, look for confirmation in both price and volume. A clear breakout above the current resistance (around $60,000), supported by rising volume and strong green Heiken-Ashi candles, would signal a renewed bull trend.
Watch Volume Closely: Keep an eye on volume spikes, especially during price movements. Rising volume during upward moves confirms the strength of an uptrend, while rising volume during downward moves suggests bearish pressure.
Monitor key support levels, such as the $50,000 region. If Bitcoin falls below this level, it might signal a continuation of a bearish trend, and you may want to wait for a stronger entry point.
Risk Management: Given the current market indecision, using a risk management strategy is crucial. Be cautious of false breakouts due to low volume.
In summary, Bitcoin is currently in a phase of consolidation with mixed signals from both Heiken-Ashi candles and volume. Patience is key. It is essential to wait for clearer market signals before making a significant practice trading decision.
DISCLAIMER: We offer NO advice and make NO claims to expertise of any kind. This site is dedicated to knowledge and education through our stock chart training, reviews and other information — nothing more.
