Identifying Market Structure 📚

A market structure tells you what trend an asset is moving in.

🔹Bullish Market Structure

Has higher highs and higher lows. This example is on the daily.

You could point out a few levels where, looking at the week before, price technically made a lower low.

But it's mainly about the general bigger movements price makes.

🔹Bearish Market Structure

Here we can see price is consistently making lower highs and lower lows. This was a big change from what we saw on the run up to $65K.

Currently, price is moving sideways but still has to make a higher high on the daily to really see a reversal.

It's possible to identify market structure on all timeframes!

While looking at the January 2021 consolidation on the 4 hour candlesticks, we can zoom in and identify a lot more pivot points.

This can often give you an idea about a low timeframe trend.

But as can be seen from the picture above, this can also cause a lot of false signals and make you flip flop a lot while price is usually just consolidating sideways in a range.

That's why zooming out often gives a good overview of what the higher timeframe trend is.

For example: $BTC's daily may be in a bearish market structure as we speak.

But the monthly tells another story.

It's useful to identify an asset's market structure on different timeframes to see what directional trade you should be focussing on that has the highest probability.

Any reversal starts on low timeframes and then slowly moves over to the higher timeframes.

Good luck! 📈📉


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More from @DaanCrypto

12 Jun
Educational Thread Overview 📚

Below, you can find all my educational threads about subjects like Profit Taking, Risk Management and others. 👇
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I see many new people come on CT and get confused by everything that’s going on in here.

Many of us on here are traders so don’t let these short term predictions, be it up or down, trouble your own long term vision and believe too much.

I may not be bearish myself currently but I think I can speak for most people when I say that the people that are bearish here are only short/mid term bearish.

I doubt many of them are bearish on Bitcoin and Crypto as a whole for the years and decades to come.

It’s up to you to form your own ideas about the market and what timeframe you’re investing over.

Don’t let me, or anyone else influence you with our analysis for the next day or week. Especially if you were planning to hold for years to come.

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$BTC Liquidity 📚

I often use the term "Liquidity" in my analysis'.

I'll explain how it works and how I use it personally.

So what does "Liquidity" mean?

While all three definitions are obviously correct, the bottom one is most relevant for us.

The levels I map out are often important pivots (reversal area's) with highs that haven't been touched in a while.

This means that there is most likely a lot of stop losses placed there. Because these are the most clear invalidation levels for most people.

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$BTC Then vs Now.

Sentiment Check at $30-40K.
1. Fear and Greed Index

Then: 90+ Extreme Greed.
Now: <20 Extreme Fear.
2. Funding Rates

Then: Consistent 0.1%+ on most exchanges
Now: -0.05 to 0.01% mostly.
Read 8 tweets
8 Jun
$BTC Thoughts On The Market + Current Range.

Updated the Wyckoff schematic with how the chart would look if we were to go for a spring.

Starting off with: Yes, I know these ranges often take longer than just a few weeks and that a 4H accumulation/distribution is quite a low timeframe.

But I do believe that these ranges will take as long as necessary for the people doing the accumulation or distribution.

If supply would be dried up and the composite man thinks he has sufficient control of the supply within the range, there is no need to exhaust the supply more. It will likely only cost him more than he gets back.

That's usually when the range resolves.

Read 15 tweets
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If me, or other traders don't say up or down because we want to wait for more certainty. This is why.

In the current pattern it's a gamble which way price may go first. Even though you might have a prefrered bias, it's best to wait for a breakout and THEN enter.
You wait for the probabilities to be in your favor before entering the trade.

Both longs and shorts are a bad risk/reward ratio from where we are right now seeing it could literally go either way or you can get a sharper entry in at a better price.
As can be seen by the example, if we simply wait for a breakout to either side, we can get a proper long or short in with a R:R of over 2.5.

If we have then calculated the probability correctly, this trade should net us a profit in the long run.
Read 4 tweets

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