VideoBenjamin CowenBenjamin Cowen

Bitcoin: Heikin-Ashi Candles

The video explains Heikin‑Ashi mechanics—how HA closes, opens, highs and lows are calculated—and emphasizes HA's smoothing effect and conservative confirmation for regime changes. Technically, HA patterns have historically masked short counter‑trend rallies, so recent breakouts resemble failed hesitations from past bear years. Seasonality and a 2018 analog point toward a potential local top near the FOMC and a decline into June, and the presenter remains skeptical of 2026 all‑time‑high calls while favoring patient entries over FOMO. Market structure shows a sentiment flip and bifurcation: Bitcoin and select large assets advanced while many altcoins did not participate.

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Key Takeaways

Heikin‑Ashi construction materially smooths price signals: the monthly HA close is 0.25*(open+high+low+close), the HA open = 0.5*(prior HA open + prior HA close), and HA highs/lows are the max/min of the actual high/low and the HA open/close — a design that alters candle shape and mutes short‑term noise.

Because of that smoothing, monthly Heikin‑Ashi acts as a conservative regime‑change filter — HA candles will stay red unless a rally persists long enough (the speaker says into June) to flip them green, but that confirmation can lag and may arrive after the low is already in.

Current rallies resemble prior midterm bear 'hesitations' (2014, 2018, 2022): historical patterns show convincing downtrends, brief counter‑trend rallies that trap bulls, and subsequent rollovers — the 2018 FOMC → late‑April top → decline into May/June is presented as a close precedent, and the speaker is skeptical of automatic 2026 all‑time‑high outcomes unless weakness fails to return by May/June.

BITCOIN

Failed Hesitations — Midterm Bitcoin bear markets often produce counter‑trend 'hesitations' that trap bulls before further declines; recent short‑lived breakouts resemble failed hesitations seen in 2014, 2018 and 2022, so current rallies warrant caution.

“So before we get to high kanashi candles, I just want you to look at the chart here and just generally note that what we are seeing is not that…”—

2026 Skepticism — The presenter doubts Bitcoin will necessarily reach new all‑time highs in 2026 simply because equities do, noting past episodes where equities rose while Bitcoin stayed bearish; he remains conditionally long term but will reassess if weakness does not return by May or June.

“There are a lot of people that think Bitcoin will experience all-time highs in 2026…”—

ENTRY-PRICING

Patient Entries — Historically in bear markets, waiting for lower entry points has outperformed chasing counter‑trend rallies, supporting a patient approach rather than FOMO buying at rally peaks.

“Would you have missed the bottom? Yeah…”—

HEIKEN-ASHI

Smoothed Open — The HA open is 0.5 times the previous HA open plus 0.5 times the previous HA close, so each candle's open depends on the prior candle and the series is smoothed to reduce short‑term noise.

“Okay, so that's the close. Now the open is 1/4 or sorry 1/2 times the previous previous tyken ashi open plus the previous I canashi close. See that?”—

HEIKIN-ASHI

HA Close — The Heikin‑Ashi monthly close equals 0.25 times the sum of the period's open, high, low and close, so the HA close reflects all four raw price points rather than the raw period close alone.

“So the close for the month is dependent on the open, the close, the high, and the low. The average of those…”—

HISTORICAL-ANALOG

2018 Analog — The 2018 sequence—small pre‑FOMC drop, rally after the FOMC, a late‑April top (~April 24), a move to the 200‑day and declines through May—is presented as a close precedent, making a local top within about a week and a drop into June the base case unless price behavior diverges.

“In 2018, Bitcoin rallied and then right before FOMC, it dropped a little and then right after FOMC, it rallied back up again and then it found a top in…”—

MACRO-SEASONALITY

June Lows — Seasonality is cited as working 'about 70% of the time' with Bitcoin tending to find lows in June (2014 an exception), but analogs can break under unique external shocks like the pandemic.

“Seasonality isn't everything. And you know, I'll talk about seasonality a lot. I'd say it works out about 70% of the time, right?”—

TECHNICAL

Monthly Threshold — Monthly Heikin‑Ashi candles act as a conservative regime‑change filter: they will remain red unless a rally persists long enough to flip them green (likely only if the rally continues into June), but this confirmation can lag and may arrive after the low is already set.

“If the rally fails within the next couple of weeks and starts to go back down, then what will happen is the monthly hyenashi candles will keep staying red.”—

Wick Signals — HA candle structure—bodies without upper wicks and long lower wicks—signals sustained downward momentum, and a shift in wick/body structure is an early indicator momentum is weakening; historically (2018, 2022) HA stayed red through counter‑trend rallies, making those rallies less reliable.

“One of the things to remind yourself of with hyanashi candles is if you have candle bodies where you don't have wicks to the upside, but you have like long…”—

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Important Disclaimers

Not Investment Advice: For education only — not financial, tax or legal advice.

AI-Generated: Made by AI from source transcripts and may contain errors.

No Guarantees: Past performance does not predict future results; investing carries risk.

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