Bitcoin Analysis Framework: Build a Buy/Sell Strategy
Use this structured checklist to analyze Bitcoin and design a systematic buy/sell plan.
1. Identify the primary trend
Open the BTCUSD instrument page. On the advanced chart, use moving averages (50/200 DMA) and weekly/monthly structures to define whether BTC is in a bull, bear, or sideways trend.
2. Mark key support & resistance
- Prior all-time highs/lows.
- Weekly swing highs/lows.
- Round numbers (20k, 30k, 50k, 100k).
3. Use momentum & volatility
RSI (14), MACD, and ATR help spot overbought/oversold zones and volatility shifts. Expanding ATR often precedes big moves—size positions accordingly.
4. Track catalysts
Bitcoin reacts strongly to macro events (Fed policy, inflation data), ETF flows, and regulatory headlines. Use the Economic Calendar and Top Stories widget for context.
5. Add on-chain & sentiment (optional)
While not natively in finstrument.ai, keep an eye on widely available on-chain metrics (active addresses, realized cap, exchange inflows) and crypto sentiment indices for confirmation.
6. Build a buy/sell framework
- Trend-following: Buy higher highs/lows in bull runs; short rallies in bear markets.
- Range-trading: Play defined ranges with stops beyond extremes.
- Event-driven: React to high-impact macro/regulatory headlines with strict risk control.
7. Risk & position sizing
Always define your risk per trade (1-2%). Use stop-losses at invalidation levels. See our guide: Risk & Position Sizing.