 Everybody, welcome back to our series of the Market Rebellion intro to TA to help people like me to understand technical analysis. This is CJ Rykel. He's from Market Rebellion, and he's graciously allowed us to use some of his time to go over some fundamentals. So, we just did the first episode where we talked about the basics of things going on, a lot of PowerPoint stuff, interesting, but this one we're going to get to more into the charts. So, CJ, take it away. Let's put rubber to the road. Thank you, Rob. So, what I wanted to go back or what I want to start it with is kind of candlesticks. Candlesticks are the building blocks of technical analysis. That's what you see on your chart. The minute you open it up, whether it's the Market Rebellion platform, trading view, finger swim, or whatever you're looking at. And just to understand how a candle body is created, say we have the opening of the candle. The beginning price of where it starts. Then if it trades down, it will create what is known as a wick. And if it trades up, it will do the same. But it depends on where the open of the day and where the closing price of the day is or were. That's what ultimately creates the candle body. Now, in this case, the candle close of the day was above the open. And so the candle body is formed green. However, if that was the inverse and the close of the day was below the open, then the candle would be colored red. And so we would have that negative momentum of how that was ultimately created. Now, there are some certain types of candles, five primary candles that I just want to make you guys aware of before we actually jump into the charts. And that is starting on the left here with the bullish engulfing candle. We also have the bearish engulfing candle. These are the most bullish and most bearish candles. They show that buyers or sellers are willing to step in and mass and truly move the price up or down. Now, the second most bullish candle we have is known as a hammer candle. It kind of looks like a green hammer. And it's created by buyers who have essentially bought the price up and created that wick. And so what you need to understand is that the momentum is finishing that candle up. And so that usually follows with a couple more bullish candles after a hammer candle. The third one we have is then just the normal bullish. That's pretty neutral. Then we have the other neutral one, the doji candle, which kind of looks like a spinning top as well. And that one is going to be most significant when at either the top of an uptrend or the bottom of a downtrend because it sometimes symbolizes indecision on behalf of the market participants and might lead to a potential reversal. The final one that I'll go over is the least bullish. That is a shooting star candle in which it's just the opposite of the green hammer. We traded all the way up. However, the bulls were not that strong enough and price traded down and momentum finished the day going down. And so sometimes we'll usually see price decline after a candle body closes in that shape. But without further ado, I want to get into some actual charts and do this live with you guys because I think it'll be a much greater learning experience. But with that being said, let me share the charts. Yeah, let's do that. Everybody likes live. Everybody likes to see what's going on. So here we're looking at the Bitcoin daily chart. And something that is pretty significant that I've highlighted throughout this entire uptrend has been these bullish engulfing candles. Now, I just talked about a bullish engulfing candle being at the bottom of a downtrend. When we have a bullish engulfing candle at the bottom of a downtrend, kind of around this area as well, as well as right here, that kind of tells me and is in technical analysis theory that by pressure is stepping up. And it's something that you should probably pay attention to because it means people are willing to step in and buy that weakness and will likely continue the trend. So that's always been the important nature to kind of understand about bullish engulfing candles because they are most significant when at the bottom of a downtrend and the inverse is true as well. When we get kind of a bullish or a bearish engulfing candle at the top of an uptrend, that's very kind of a warning signal that we may reverse as well. So that's kind of just a bearer overview of candlesticks. What I want to mention now is another core piece of technical analysis, which is support and resistance levels. And so support and resistance levels are basically just two prices where kind of the range trades around. And so when I draw a support level or when you draw a support level, you want to pick a point in which the candle body has hit multiple times. Let me make this a little bit more white so you guys can see it better. But as you can see, we had a candle body hit here as well as here and here. So if you have about three solid hits or four solid hits over time, that's an area in which price has created support or resistance. So on the way up, like for instance, if we're going at it like right here, it would be considered resistance because we're trying to get up but we can't. However, on the way down, it would be considered support because after we break above resistance, theoretically, it then becomes support. So we'll backtast and likely go up. And I'd like to draw just a couple more lines to show you guys kind of the range that price is traded in. This would be a level as well since we have support hitting here on those candles as well as here and here. So as you can see that 55k level for Bitcoin, it's been a strong support level. And when we match it up with the technicals, we can see it even more pronounced. So that is kind of the basics of support and resistance. When it comes to actually acting on a trade and what gets me into a trade is when we have a flush break above a prior resistance level. So here, for instance, I wouldn't even, I mean, I know we're already over 61k but I wouldn't mind entering this level because it's a breakout above previous and historic resistance. And so any breakout above historic resistance to a new all-time high is typically a trade that I really like to enter and is a setup that I'd be very favorable to. Now, there's also something cool going on in this pattern that I haven't mentioned yet, which is known as a triangle formation. And in technical analysis, there are symmetrical triangles, ascending triangles, and descending triangles. And they are all continuation patterns of the existing trend. If you're in an uptrend and you kind of land at a symmetrical triangle, typically it's going to break to the upside and continue. This and what we're looking at here is an ascending triangle and I'll describe why. An ascending triangle consists of an upward sloping trend line like this where the trend creates a series of higher lows. So this is a higher low because it's higher than the previous here. And the same is true for this touch point and this touch point. And then when you have price getting rejected at a single resistance level, that makes the ascending triangle. And when you have roughly five touch points and you get closer to this apex, ascending triangles typically break to the upside 70% of the time when in the midst of an existing uptrend. So this is a trade insights or a trade setup that I was very favorable to because due to the fact that we're creating almost new all-time highs and are in that existing uptrend with the ascending triangle, this is a pretty nice area where I could place a bet that we would break to the upside. And the other thing that you can do with the ascending triangles is you measure the initial leg up so you would measure this distance. You'd measure this distance and then if you take that and extrapolate it to the breakout point, you could get a completion of the pattern, which would be a rough projection of about 78k. So we'll see if we continue to hit and fulfill that projection afterwards because it's been pretty spot on to the technicals thus far. Last thing I want to mention before I pass it back to Rob here is just has to do with the inverse of what we talked about. So I just talked about an ascending triangle in Bitcoin's formation, but I want to take you guys back in history to one of the most notorious descending triangles in all of Bitcoin's history. And I remember a lot of people around this time were saying 6k is the bottom, we're never going below 6k. And there were other people in the space who said, no, if we're doing this by a technical formation, this is a descending triangle and we have a 70% chance of breaking to the downside because we're already in a bear market. And so if we connect those higher lows, or excuse me, those lower highs, because this is a lower high, it's a high price relative and lower to the previous, and when you get a series of those, it creates the descending triangle in which 70% of the time, once you break that bottom support level, you're probably going to fall roughly that distance of the leg up. So that's an example of an ascending triangle and a descending triangle throughout Bitcoin's history. And also kind of an example of how you can kind of break the port lines and resistance lines to try to see where price is going to go next. Gotcha. Well, that was a lot of information and I was trying to absorb it all. So for you at home right now, watch this, watch that about two or three times and that'll make a little bit more sense. But here's the thing that I want to make mention of. First of all, well, let's go back real quick. CJ, you just showed us potentially Bitcoin to $78,000. I think that piqued everybody's interest, who is at home. Listen, I'm not one you're going to watch this, but today is April 13, 2021. It's about high noon and Bitcoin just hit that's all time high. So to go from 62,000 to 78,000, I think it was because we drew those lines. Let me take a look at where it was before where it could go. What are we talking about time frames? Let's just get that out of the way because technical analysis, it can't tell you essentially like the time frame. But for this one, how can we take a look at that? Or can it actually tell us the time frame? If we take a look at the other triangle and just go, well, it took this long. So it might take this long. That's a good question. And it's not always concrete. Sometimes, I guess if you were to look at the actual textbook definition of an ascending or a descending triangle, it would require five touch points on the one, two, three, four, five. But that's not always the case. Sometimes we'll actually break before we get to the apex of the triangle. We'll actually break either to the upside or the downside, sometimes only 50% or 70% through the actual apex. In terms of a time frame, this is kind of a rough estimation. I mean, it's generally no longer than the amount of time in which took to form the triangle. Typically, once you break out of this triangle, it'll be a pretty quick catalyst and sometimes a back test down before even going higher. But there isn't a concrete time frame. I would just say that it's usually shorter than what takes the entire time to form the triangle. Also, another thing touching on time frames is that I showed the weekly before, and I was just showing the daily. There are also the hourly and the four hour. In a very generalistic way, the longer the time frame is, the more likely that it will follow the technical analysis and will be more sound to the theory because more traders are looking at that chart than, say, the 15 minute or the 10 minute. And technical analysis is kind of a self-fulfilling prophecy in many ways because you have all of these traders looking at the same charts and they're all looking at the same levels. And when price hits a certain level, they decide to either get in or vice versa. So that just kind of proves the things that we've already talked about. So we talked about just what CJ said, self-fulfilling prophecy. If you can find it, that means somebody else can find it. And if two people could find it, that means 1,000 people can find it and 10,000 people. And before you know it, you've got a situation where you're like, I either got to sell, I got to buy, or I got to get the heck out of the way. So there's that. And then what CJ also said about the 70% rules on this one, technical analysis can't give you 100%, but it can get you more in the driver's seat to where things are going, could go, and potentially might be something bigger than what you think it is. So just take a look at that. So technical analysis, fundamental analysis, maybe a little sentiment analysis and get the best information, do your own research, and it makes a lot of sense. So CJ, thanks for following up for this second series. We appreciate it. And then we're going to continue on in our third series in just a bit. So thanks for stopping by. CJ, thanks so much. We'll hit you on the next one.