How to follow up when the monthly moving average sticks + weekly line chooses direction + daily line breaks through with large volume and long Yang?

A monthly MA stick, weekly bullish cross, and high-volume daily breakout signal a potential strong upward move—confirm with volume and multi-timeframe alignment.

Jul 29, 2025 at 06:57 am

Understanding the Monthly Moving Average Sticking Pattern

When traders refer to the monthly moving average sticking, they are typically observing a scenario where the price of a cryptocurrency has been consolidating or moving closely along a long-term moving average—commonly the 20-month or 50-month simple moving average (SMA). This behavior often indicates a period of equilibrium between buyers and sellers over an extended timeframe. The sticking pattern suggests that the market lacks strong directional momentum and is possibly building energy for a breakout. It is crucial to monitor whether the price remains above or below this moving average, as sustained positioning above it can signal long-term bullish sentiment. Traders should mark this level as a key reference for potential trend validation once shorter-term indicators begin to align.

Interpreting the Weekly Line Directional Choice

The weekly chart plays a pivotal role in filtering out noise and identifying the dominant trend. When the weekly moving average lines—such as the 9-week and 21-week EMAs—begin to converge or cross, it reflects a potential shift in momentum. A golden cross (shorter MA crossing above longer MA) on the weekly chart strongly suggests bullish momentum is building. Conversely, a death cross may indicate bearish control. In the context of a monthly MA sticking scenario, the weekly directional choice acts as a confirmation signal. If the weekly trend turns upward while the price has been hugging the monthly MA from below, this could indicate accumulation and a higher probability of an upward breakout. Monitoring volume during this cross is essential—rising volume on the weekly bullish cross increases the reliability of the signal.

Recognizing a Daily Breakout with Large Volume and Long Yang Candle

The daily chart provides the most actionable signals for short- to medium-term traders. A breakout with large volume and a long Yang (bullish) candle is a powerful confirmation that institutional or large retail players are entering the market aggressively. A long Yang candle is defined as a green candle with a significantly longer body than wicks, indicating strong buying pressure from open to close. When this occurs alongside volume exceeding the 20-day average by at least 1.5 times, it suggests conviction behind the move. This breakout should ideally occur above a key resistance level or a recent consolidation range. The combination of high volume and a strong close near the high of the candle reduces the likelihood of a false breakout. Traders should verify that the breakout aligns with both the monthly support and the weekly bullish crossover to increase the probability of sustained upward movement.

Step-by-Step Follow-Up Strategy After the Signal

Once the three conditions are met—monthly MA sticking, weekly bullish direction, and daily high-volume breakout—traders must act methodically.

• Confirm the alignment across timeframes by checking that the monthly price has been hugging the MA from below and is now moving above it, the weekly EMA crossover is bullish, and the daily candle has closed strongly above resistance with high volume.
• Set entry points: Consider entering either on the close of the breakout candle or on a retest of the breakout level in the following 1–3 days. A retest that holds above the breakout zone with diminishing volume adds confidence.
• Place stop-loss orders just below the breakout candle’s low or below the recent consolidation range. For more conservative traders, placing the stop under the weekly support level adds protection against deeper pullbacks.
• Determine position size based on risk tolerance—never risk more than 1–2% of trading capital on a single setup.
• Use trailing stops after the price advances 5–10% to lock in profits while allowing room for continuation.

Monitoring Post-Breakout Price Action and Volume Trends

After entering a position, continuous monitoring is critical. The initial breakout is only the beginning. Watch for follow-through candles in the next 3–5 trading sessions. Ideally, each subsequent green candle should close higher than the previous, supported by consistent or expanding volume. If volume drops significantly after the breakout, it may indicate lack of participation and a potential trap. Look for the daily RSI to remain above 50 but not immediately enter overbought territory (above 70), as this could precede a pullback. Additionally, check whether the 20-day EMA begins to slope upward—this confirms short-term trend alignment. Any retest of the breakout level should occur on lower volume and hold firm, reinforcing the new support zone.

Using Additional Indicators for Confirmation

While price and volume are primary tools, integrating secondary indicators can improve decision-making.

• MACD on the daily chart should show the signal line crossing above the zero line or the histogram expanding in positive territory.
• On-balance volume (OBV) should trend upward, confirming that volume is supporting the price rise.
• Bollinger Bands can help assess volatility—breakouts accompanied by band expansion suggest strong momentum.
• Ichimoku Cloud analysis on the daily chart can offer dynamic support/resistance levels; a breakout above the cloud with the price above the Kumo reinforces bullishness.

These tools should not override price action but serve as convergent evidence to support the core multi-timeframe structure.

Frequently Asked Questions

What if the weekly moving average lines haven’t crossed yet, but the daily chart shows a large-volume breakout?

Even with a strong daily breakout, the absence of a confirmed weekly directional choice introduces higher risk. Without weekly alignment, the breakout may lack sustained support. It’s advisable to wait for the weekly close to confirm the crossover or at least observe a clear upward slope in the weekly MAs before committing full position size.

How long should I wait for a retest after the breakout?

A retest typically occurs within 1 to 5 trading days after the breakout. If no retest happens and the price continues to rise, it may indicate strong momentum. However, if the price moves more than 10–15% above the breakout level without a pullback, the opportunity for a low-risk retest entry may have passed.

Can this strategy be applied to altcoins, or is it only suitable for major cryptocurrencies like Bitcoin?

This strategy is applicable to altcoins, especially those with sufficient liquidity and clear chart patterns. However, altcoins often exhibit higher volatility and are more prone to pump-and-dump schemes. Ensure the volume spike is genuine by checking on-chain data or exchange-specific volume reports to rule out manipulation.

What defines “large volume” in the context of a daily breakout?

Large volume means the trading volume on the breakout day is at least 1.5 times the 20-day average volume. For cryptocurrencies with erratic volume, consider using a 30-day average and confirm that the volume is significantly higher than recent sessions, especially those during consolidation.