Home / Crypto Analysis / Technical Analysis / TD Sequential: Bitcoin Time Momentum Indicator Analyzed

TD Sequential: Bitcoin Time Momentum Indicator Analyzed

Last Updated February 12, 2024 10:48 AM
Andrew Kamsky
Last Updated February 12, 2024 10:48 AM
By Andrew Kamsky
Verified by Peter Henn

Key Takeaways

  • Bitcoin’s 32-week trend shows definitive TD Sequential nines indicating cyclical momentum shifts.
  • Post-ETF approval, Bitcoin corrected 20%, then quickly recovered, starting a new bullish two count on the weekly timeframe.
  • Monthly TD Sequential on five suggests continued growth, with Bitcoin well above the $32,700 moving average.
  • Weekly and daily charts indicate early-stage uptrend and short-term momentum, with strong support levels.

Over the last 32 weeks, Bitcoin’s price has seen TD sequential patterns made up of nines. 

Historical TD Sequential Over 32 Weeks
Historical TD Sequential Over 32 Weeks

In the last 32 weeks, Bitcoin’s trajectory exhibited a nine- week decline, followed by an 18-week rally, peaking with the January 10 approval of a Bitcoin exchange-traded fund (ETF). Upon the news of the ETF approval BTC experienced a 20% correction over three weeks. However, Bitcoin bounced back, recovering from the 20% correction. Now, Bitcoin is signaling a bullish momentum trend with a two count above a one in the weekly time period TD Sequential, hinting at new uptrend.

Monthly Analysis

The monthly chart shows Bitcoin is currently on a five count, above a four, suggesting a continuing uptrend of potentially four more months. The latest Heikin Ashi candle is substantial with a large body, indicative of strong buying pressure. Notably, there is no wick at the bottom and a wick at the top. This indication demonstrates the strength of the current upward movement. The 20-period monthly Moving Average (MA) stands at $32,000, which Bitcoin is well above. Perhaps more notably, BTC is not expected to go below the monthly 20 period moving average.

BTC Monthly TD Sequential Count And Monthly Moving Average
BTC Monthly TD Sequential Count And Monthly Moving Average

Weekly Analysis

On the weekly chart, Bitcoin is on a two count above a one, indicating the early stages of a bullish setup. It seems likely that there will be seven more weeks of upward movement. The strong Heikin Ashi candle with a large body and no lower wick corroborates the continuation of the uptrend. The 20-period MA is at $39,600, and Bitcoin’s price above this average further supports the bullish sentiment.

BTC Weekly TD Sequential Count And 20 Week Moving Average
BTC Weekly TD Sequential Count And 20 Week Moving Average

Daily Analysis

The daily chart presents a six count above a five. The pattern suggests the potential for continued upward movement for another three days before hitting a possible top. The Heikin Ashi candle is strong, and the 20-period MA is at $44,400, which may serve as dynamic support in this bullish phase.

BTC Daily TD Sequential Count And 20 Day Moving Average
BTC Daily TD Sequential Count And 20 Day Moving Average

Overview Of TD Sequential And The Significance of nines

The TD Sequential is a technical indicator used to identify potential price points where an asset’s price movement is exhausted and likely to reverse. It is a sequence-based indicator, primarily developed by market timing expert Tom DeMark. 

The indicator counts up (for sell setups) or down (for buy setups) to nine , which typically signifies exhaustion of a trend. Historically, the occurrence of nines suggests that the trend has been strong for a significant period, and the market may be due for a correction or reversal when approaching a nine in either direction. 

What are Heikin Ashi Candles?

Heikin Ashi candles are a variant of the traditional Japanese candlesticks. They differ in that each candle is calculated and plotted using information from the previous candle. This, in turn, results in a smoother picture. 

Specifically, Heikin Ashi candles use average price data to reduce market noise and are particularly useful in identifying strong trends. A large-bodied Heikin Ashi candle with no lower wick and an upper wick indicates strong buying pressure and continuation of the uptrend.

Disclaimer

​​The information provided herein is for educational and informational purposes only and should not be construed as financial advice, investment recommendation, or an offer or solicitation to buy or sell any securities. Cryptocurrency investments are volatile and high risk in nature, do not invest more than you can afford to lose. 

Was this Article helpful? Yes No