Steemit Crypto Academy – Season 2 - Week 8 - Post for @stream4u

Pivot Points

When it comes to cryptocurrency technical analysis, there are a lot of strategies and indicators that and very popular, effective and beneficial in helping traders capitalize on the market movements to make more profits. Pivot Points is one of the many technical indicators used in technical analysis for determining the possible support and resistance levels in the market. This type of indicator can be classified as a leading indicator because it is mainly used for predictions when carrying out technical analysis on a particular cryptocurrency asset. The Pivot Points indicator basically uses basic price actions such as highs, lows and close from the previous day to form the base reference points. With that, the Pivot Points indicator plots the support and resistance levels away from the base point. With this, Pivot Points can also help traders and investors to determine the best possible entry and exit points. For traders, aside knowing the best entry and exit points, Pivot Points can also be used to determine the best possible position to set stop loss or take profit. The main general rule of the Pivot Points is that when the market movement of a particular cryptocurrency asset is above the central pivot, then the market is bullish and when the market movement is below the central pivot, the market is bearish.

Benefits of Pivot Points

The Pivot Points indicator has proven to be a very useful and effective tool for technical analysis, to help cryptocurrency traders capitalize on the market movements and make more profit. As a very popular technical analysis indicator used by a lot of traders, the Pivot Points offers a lot of benefits. Some of the benefits of Pivot Points are;

• Pivot Points indicator can help indicate the support and resistance levels.
• With the Pivot Points indicator, a cryptocurrency trader can determine the best possible entry and exit points.
• Pivot Points can help cryptocurrency traders and investors determine whether the market is bullish or bearish

Details about Pivot Point Levels

The Pivot Point Levels are basically made up of the support levels and the resistance levels. When it comes price charts and technical analysis, support levels and resistance levels play a very important role in not only price forecasting but also determining the best entry and exit points.

Support levels

Support level on a cryptocurrency chart basically refers to the level at which the price of a cryptocurrency pauses or better still bottoms at when moving in a downward direction or a downtrend. In other words, it is the level where the price of a cryptocurrency hits a floor on a downward direction or a downtrend before making a correction back upwards. That floor level where the price hits and bounces off to an upward direction is known as the support level.

Resistance level

Resistance on the other hand, is basically like the contrast of support level. The resistance level basically means the level at which the price of a cryptocurrency pauses or better still tops out when moving in a downward direction. In other words, it is the level where the price of a cryptocurrency hits a ceiling on an upward movement or an uptrend direction before making a correction back downwards. That celling level where the price hits and bounces off to a downward direction is known as the resistance level.

Mаin Рivоt Роint – This is basically the center point on the cryptocurrency chart. The main rule of the Pivot Points is that when the market movement of a particular cryptocurrency asset is above the central pivot point, then the market is bullish and when the market movement is below the central pivot, the market is bearish.

S1 – This is basically the first or principal support level, it is the support 1 above the center pivot that indicates the bullish movement.
S2 – This is basically the second support level or the support 2. S2 is below the S1 level.
S3 – This is basically the third support level or support 3, represented as S3 and is below the S1 and S2 levels.

R1 – The R1 is basically the first or the principal resistance level and it is above the center pivot point. This is known as the resistance 1 or the first resistance level.
R2 – The R2 is basically the second pivot level or the resistance 2. This is the second resistance level above the pivot level.
R3 – The R3 is basically the third resistance level or the third pivot point level that is above the center pivot.

Pivot Point Calculation and R1 R2 S1 S2 Pivot Levels Calculation

Pivot point is calculated by adding the high, low and close and diving by 3 which can be represented using the formula (High+Low+Close)/3

The S1 is calculated by using the formula, S1 = (Pivot × 2) – High
The S2 is calculated by using the formula, S2 = Pivot − (High − Low)
The S3 is calculated by using the formula, S3 = Low -2(High - Pivot)

The R1 is calculated by using the formula, R1 = (Pivot × 2) – Low
The R2 is calculated by using the formula, R2 = Pivot + (High − Low)
The R3 is calculated by using the formula, R3 = High + 2(Pivot - Low)

How to Apply Pivot Point on Chart

To apply pivot point on chart, I will be making use of tradingview platform using the AAVE/USDT pair.

• First visit the tradingview website at https://www.tradingview.com
• On the tradingview platform, Choose your preferred cryptocurrency pair for the chart. For this, I chose the AAVE/USDT pair

• Click on the indicators tab
  

• On the search, search for Pivot Point
• Select the pivot point standard option from the list

• The pivot point indicator will be added to your chart.

How Pivot Points Work

The Pivot Point indicator is basically an indicator for predicting support and resistance levels. On a chart, the pivot point indicator determines the different support and resistance levels. The Pivot point is works based on previous price action such as the high, low, and closing prices. Looking at the chart below, we can see the center pivot point which indicated the bullish trend of the market. The market have moved above the first resistance, the second resistance and above the third resistance. Also, we can see the various support levels. During the corrective phase, the market went below the center pivot indicating the bearish trend. The market moved below the first and second support levels. Currently, the market is still below the center pivot and the first resistance level which still indicates the bearish or downtrend.

Pivot Point Reverse Trading

The pivot point reserve trading basically shows the relationship between the previous price actions such as high, low and close. In pivot point reversal, after an uptrend, the close is below the previous low with the highest high. After a downtrend, the close is above the previous high with the lowest low.

What could be a common Mistakes in Trading with Pivot Points

Some of the common mistakes associated with trading with pivot points are;

• When the trader has no idea of supply and demand
• When the trader follows the pivot lines blindly without understanding price actions in the market
• Not paying attention to the support and resistance levels
• Only making use of low time frames and not referencing high time frames as well
• Not focusing on a consistent strategy

What could be the reasons For Pivot Points is Good

The Pivot Points indicator has proven to be a very useful and effective tool for technical analysis, to help cryptocurrency traders capitalize on the market movements and make more profit. As a very popular technical analysis indicator used by a lot of traders, the Pivot Points offers a lot of advantages. Some of the advantages of Pivot Points are;

• Pivot Points indicator can help indicate the support and resistance levels.
• With the Pivot Points indicator, a cryptocurrency trader can determine the best possible entry and exit points.
• Pivot Points can help cryptocurrency traders and investors determine whether the market is bullish or bearish
• Pivot point indicator is not a complex indictor which means anyone can make use of it
• It can help traders know where to set stop loss

Apply the Pivot Points indicator in the Today chart

For this demonstration, I will be using the AAVE/USDT trading pair. From the chart, we can see that the price was in a downtrend and was moving in a sideways direction. This was the accumulation phase and after that, the price began to break above the center pivot which is also the main pivot at $375.75. The price broke above the center pivot which indicated an uptrend movement. The price continued to push up and broke the first resistance level. It hit a resistance at $401.41 before reversing back down below the first resistance level R1.

The price didn’t reach the previous pivot point but was moving horizontally on the new pivot point. The price moved above the new pivot point and was able to go above the new resistance level and began to move sideways. On the new center pivot point, the price is on a downtrend as it has gone below the main pivot point. The price has continued to decrease and has gone past the first and second support levels, reaching the third support level before it made a reversal back up and above the second support level. Looking at the price movements, I can predict that the price might go back down and possibly go below the S3 support level by the end of the day.

Weekly Price Forecast for Crypto Coin: Binance Coin BNB

When it comes to utility cryptocurrencies, Binance coin BNB is among the top cryptocurrencies that fall under the utility tokens. Binance needs no introduction as they are one of the largest cryptocurrency exchanges. The Binance ecosystem is large with one of the most used blockchains the Binance smart chain BNB runs on the binance smart chain and binance chain and is the utility token that powers the binance ecosystem. BNB remains one of the top cryptocurrencies with a large market capitalization. At the moment, BNB is ranked 4th on coinmarketcap which makes it a great cryptocurrency with great fundamentals.

Based on the current statistics on the coinmarketcap website, BNB has a current martketcap of $60,654,604,717, Fully diluted marketcap of $67,520,195,438, Circulating Supply of 153,432,897.00 BNB, Total Supply of 169,432,897 BNB and a Max supply of 170,532,785 BNB. UNI can be traded mostly on Binance, Kucoin, FTX, Gate.io.

Why I chose BNB?

For me, I’m a huge fan of BNB and BNB is one of the top cryptocurrencies. We all know that Binance is probably the biggest cryptocurrency exchange by volume which is great for the continuous development BNB which for me is a strong fundamentals. Also, I prefer to invest in cryptocurrencies with large market capitalization as they are less risky. Even though large marketcap cryptocurrencies do not produce high profit margins, they are less risky and offer a more stable profit. BNB is one of the top utility tokens and is used across the Binance ecosystem which helps to increase the demand for BNB. The higher the demand the greater the chance of price increase. Also, there a lot of volume and liquity for BNB and can be traded on other exchanges like Kucoin, FTX, Gate.io.

Technical Analysis and Price Forecasting of Crypto Assets Using BNB/USDT pair

For this demonstration, I will be carrying out technical analysis to forecast the price of BNB in the next week using a few technical analysis tools. I will examine the 30days price charts of BNB on coingecko in order to determine the direction of the market in past 30 days... I will be focusing only on technical analysis to forecast the future price of BNB in the next week.

BNB Statistics on Coingecko

On May 28, the price of BNB was around $335.25

On May 21, the price of BNB was around $329.42

looking at the price of BNB in the past 14days, we can see that there is a slight increase in price, however, the market have been moving in a sideways direction for the most part.

Technical Analysis and Price Forecasting of Crypto Assets Using BNB/USDT pair

For this demonstration, I will be carrying out technical analysis to forecast the price of BNB in the next week using a few technical analysis tools. I will examine the 30days price charts of BNB on coingecko in order to determine the direction of the market in past 30 days... I will be focusing only on technical analysis to forecast the future price of BNB in the next week.

Looking at the daily chart of BNB, with the help of the pivot point indicator, EMA indicator and volume indicator we can see the market movements. Looking at the pivot point indicator, the main pivot point was at $200.50. The price is above the main pivot point and began to move horizontally. However, the price picked up momentum and began to increase in an uptrend direction. The price broke the R1, R2, R3, R4 and R5 resistance levels. The price hit a resistance level at around $595.09 before moving horizontally. The price picked up an upward motion again before moving sideways and then hitting a resistance level of about $676 before correcting into a downtrend. The price is below the main pivot point and has broken below the S1 support level but is finding it difficult to reach the S2 support level.

BNB/USDT Chart on Tradingview

Based on which Technical study the possible low level and the high level for the next 1 week?

Based on my technical analysis and looking at the BNB chart using selected indicators, we can see the different support and resistance levels and their price points. Currently, BNB is in a downtrend. In my opinion, the next possible low of BNB is $265.35 and the next possible high of BNB could reach $278.45.

Conclusion

When it comes to cryptocurrency trading and technical analysis, there are a lot of tools that are beneficial in when it comes to price prediction and capitalizing on the market movements in order to make more profits. The pivot point indicator is an amazing indicator that when utilized correctly can help cryptocurrency traders make accurate prediction of best entry and exit points, determine support and resistance levels which is great for entry and exit as well as setting stop loss. However, it is also important to know that no indicator is perfect and that is why it is important to always make use of other indicators to help confirm the signals.

@stream4u