rzmb44的BITSTAMP:BTCUSD的Looking for a Long in Bitcoin

Looking for a Long in Bitcoin

I covered my last short yesterday and I'm now focusing on finding a long position. Cycles helping me with the timing.

Bitcoin trades on a 55 day cycle. This doesn't mean it makes an exact low on day 55. It means that every 45-60 days we need to be on alert to make a low. That yellow box is what I call a "timing band." It mainly helps us know that we are in a timing area where the chances of finding a low are higher than normal. That is all. The cycle also helps me from taking profits too early. In this choppy mess last week I guarantee most traders covered as they were confused. I covered some short term trades, but I held my main short through that mess because of cycles.

We need price action to help us find the low. We don't just buy blinding. There always cycles that are off just like a rogue wave in the ocean. So we have to use stops and we have to look for signs that we are going to turn. And by all means, you will get stopped out trying to buy lows, but once you get a position, your profits should outperform your losses.

We are at day 45 in the cycle. So what else can we see here:

1. The last cycle was long so I'm on a alert for a short cycle. That means that it is possible today could be a low.
2. The last 40 days has been incredibly choppy which tells me that there is a lot of indecision.
3. We are on week 25 of a 25-30 week cycle. Which means it would be a perfect time to find a weekly cycle low.

That said, I'm not quite ready to buy. We are still in a bear market. There are no signs of a bottom just yet. We could tank next week and capitulate lower. There are 10 days left in the cycle, so take a cautious approach.

My plan is to watch lower time frames. I may take a shot at this $3350-3400 area but I'll have a tight stop. I don't normally like diagonals but its respected this line 5 times. If we got to that orange zone, I will definitely looking to buy. I believe there is a high probability that we at least bounce in that area.

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I have not taken a long yet. (not short either)

Could we have bottomed? Sure. But its a bear market and its still day 49 so plenty of time to take one more dip. That pink shaded area is so close. Its the area we rejected then made one last dive before the big breakout. It never got retested so its a great area to revisit. That doesn't mean it has to happen, just very common to see it. And so far, price action is neutral at best. Possible we are making a triangle before one last move down.

Here is my plan to enter.

Best thing would be one more dive down to that area. This late in the cycle and I'm entering at $3250 with a stop at lows. If I get stopped I wait. Nothing says we can't have 7 strong days of downside so if that 3250 area doesn't hold, no sense in holding and hoping.

Otherwise, if we move up over the green line and get back into that range then make green a support, I will buy with a stop below that support. So looking to see $3500-$3550 then hold it. The next buy would be $3600 area if we get over that and hold. Any strong break through that zone and I start building a long as we move up. In this case, I wouldn't get the exact bottom but in a bear market I'm happy to let the market prove its ready to get back through all this support.

I'm not big on trading diagonals, but if we can't get past that orange diagonal line, this weekend, it would be a bad sign.

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I know this fractal isn't anything new but until we see it break I would be wary of seeing the same thing here in the next few days. At the same time, patterns like this usually don't last this long, so its due for a break and probably will lead to a big move. In the short term, a move down to a new low makes sense. In the least, yesterday's low volume pump led to an immediate rejection, so that isn't bullish.

I think we either need to retest that $3250-$3300 area or it needs to get over $3500 and prove that as support. We are on day 50 so I'll be setting buy orders under $3350 with most under $3300.

If we recover, then I'm looking to see $3500 reclaimed and made into support, then I might nibble on longs up there depending on price behavior.

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This doesn't have to be that difficult. It has been 6 days in this trading range.

The perfect resolution would be to drop down and retest the bottom of the wedge and retest the $6250 area in the next 2 days. That area never touched again after breakout so it just makes sense. As I've said, I will be a buyer at that spot and it would line up perfectly with the expectation of a cycle low.

But.. its taking a long time for us to break down of this 6 day range, so we have to be open to the idea that we might be running out of sellers, gaining some accumulation in which case we break up over $3500 and turn that into support and make a bull run into the next cycle.

I really don't have a feel for whether we go up or down. I'll just wait for either scenario and make my trade.

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Today is the first day that we are seeing bullish price action.

This is what you want to see. We are getting thrust, consolidation, thrust. We have 2 good green 4H candles with better volume. This 2nd 4H isn't even closed and it has good volume.

So adding to my longs here and will hold them with stops at lows unless I see bearish price action. Will look to add again when we consolidate this move. Whether its here or higher prices.

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OK. That basically confirms it the cycle low Just squeezed all the late shorts. If you didn't get in, I wouldn't recommend it up here. No matter where we go, I would not short or long this. Just hang onto your position until we form some kind of consolidation. Then I'd look for a long.

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Hopefully you can now understand my thought process the last 2 weeks and how you can use cycles to get good entries and exits. Why I decided to cover shorts and why I nibbled at longs then waited for a sign of strength to enter. Once its late in the cycle, you just have to take your profit and have patience for that reversal.

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So far, this looks like a bear flag. A slow grind down that isn't accelerated. Its a bit different than the spike and drops we had, though I think everyone is on the lookout for another bart. I added a leveraged position here with a fairly tight stop. I will still hold positions from lower. In a strong bullish trend, the .382 will hold. If we we fall through that today then I expect us to go down to $3480 - $3520 where I'd add a larger position.

This is a good set up so far but it needs to find buyers and make a second push above the big candle. And I'd like to see this happen in the next 24 hours. When these flags get too long they eventually run out of steam and sellers gain confidence and force a drop. Bulls are in control, they need to stay that way. We are hoping they bait shorts into shorting this slight weakness, then run the stops up to $6800 area.

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Sorry ... BULL Flag, in other words, its bullish price action. A slight dropping channel where longs are consolidating.

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The bull flag was a bit spikey and filled with a few stop runs. It also ran a bit long, but we REALLY need to see this hourly candle close high and get continuation to a new high her. Otherwise, I'd be concerned.

This is a bear market, so its possible we could top out early so I do not want to see this fail and have to revisit $3400's unless its a quick move down that gets buyers for liquidity. Want to see us trend up here to end of day. This is the big test to see if we can get a 2nd thrust here

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So the close was neutral to bearish. I really wanted to see better follow through. So far every candle on the one minute chart is selling. The bulls that just broke this out now have to prove they have enough capital to keep driving it. This is the opportunity now to drive price up through the $3620 area and squeeze all of these wicks on the flag. If they can't muster up some buys here, I will likely day a day trade short. I will still hold my swing trade long, but I really want to see some buying on this next candle.

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My alarm woke me up. I had an order at $3538 that got filled. I front ran the 3535 50% fib line and that channel. The fact that this happened at NY open is a good sign. It looks like a good entry. A few weeks ago I got stopped by $3 and today I got filled with $3 to spare. Just shows you how the market works both ways and just can't get emotional when you barely get stopped out.

If you wanted to take another long, then this area here between $3530 and $3560 isn't a bad spot to reload. Often when we get a wick down like this around NY open we tend to reverse so could see us trend up all day.

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FYI. I will manage this like a day trade. My expectation is that all these wicks below $3560 are big traders trying to get long. So I want to see follow through TODAY. I want to see us trend up over $3600 or break up higher. I believe if big money wanted to take us lower, they just had the chance here on this wick.

At the same time, If we wick down like this but then struggle to move up today I will likely exit and then wait to see if we hit my green zone there. If they didn't get filled then its possible they need to keep stepping this down. This is the hardest thing about short term trading and difficult to explain in journal like this. But I have expectations for specific trading behavior and if I don't get it, I get out of my trade.

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OK. So what happened today? We had a wick down that got bought up aggressively. I got filled. This was almost 12 hours ago. BTC went nowhere today. The bulls had an opportunity but not enough buyers to drive it up.

A wick down that gets no follow through is bearish. I also think Ethereum is looking bearish. So I am closing this last trade.

I will STILL keep open my swing trade long at lower prices. Just think we are more likely to make another move down here so I'll look to add lower.

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So far, the last week of price action has been shitty. Last night I got out of my
day position. I thought I might have made a mistake after a strong run this morning, then watched it collapse and fall back into the range. More stop runs.

This is just an example of a low liquidity, trendless market. No buyers or sellers with conviction. Does not inspire confidence and if we generally go sideways, it will be hard to trade cycles. Because of this, we need to be cautious in longs. I will not be buying anymore. (I won't short yet either).

But I see 3 likely scenarios

1. Green. We eventually make another push out of this crappy looking flag, then top out in another week or so around the red.

2. Orange - Drop down a bit, maybe to $3400 even and then go visit that red line and top out.

3. We have one more push down which could give us a LONG 70+ day cycle low. The longer it takes the less likely this is possible, but its still possible.

These are the most likely, though I doubt its 3. I think it most likely that this cycle tops at $3800 but could make the green shaded area. So I won't automatically sell the red but I'll take some profit if we get there. If we do get there and its weak, I might be looking to short it in 5-12 days.

The last scenario I don't want to talk about is that we topped on day 1. I don't think this is the case. Those are rare And I hope its not because its the most difficult to trade. If we get that scenario, then I'll start a new post.

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Some really wild action this weekend. To go up that much then go straight down then turn back up. Its hard to trust this price action. If this is going to take another run up, then I'd like to see the $6430 hour hold into tomorrow. Then I think we'll have a shot at $3800 or higher.

Big concern now is that this move JUST barely made a higher high, so i'm hoping we stabilize and move up again tomorrow and maybe start trending up.

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Last 24 hours of price action was very good. Very constructive. Haven't seen that in a while. A call this behavior "stacking greens" - it means that rather than 1 big 5 minute candle that marks a top, we just get short little green candles one after another with occasional small drops that get bought up aggressively. Then you march up without a major pullback. This is a sign of big money building price up.

We are on day 12 of the daily cycle. So I think we'll have another week and probably go hit that $3800-$4000 area.

There is no weakness at all, so don't short this. If we pause at this downtrend line, that would be normal. I think we are bullish if we stay over that blue line. If we get an hourly close under that red line, then I'll start thinking about whether this is the cycle high.

I believe its more likely we grind then jump up to the next level and then I'll be more inclined to look for a short. If we can climb up over $4200 then I will be more patient. Lets see what this week brings during the weekdays

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I'll take 25% profit here due to the fact its a bear market approaching resistance. If we get some consolidation I will look to add to back to my position on a pullback and I will also look to buy a leveraged position if it looks constructive.

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I bought back my position in various spots over the last 24 hours. If we go lower, I will open a new leverage long.

I have a gut feeling we won't see it. We've been going down since September and this market needs to punish late shorters. If you look at all the bear market rallies since December 2017, you'll notice that many of them just go up aggressively and don't pull give pull backs. Everyone is talking about waiting to buy $3700-$3800 and this seems like a situation where they won't get an entry.

Big money will try to trap the shorts and won't let anyone get in that missed the move. Its happened 5-6 times now. I think the longs are just holding this position and will make another move up to $4200.

And I really think $5000 is feasible even in this cycle. And it would make for an amazing short.

We won't know for sure until we see how it trades.

For now, I plan to stay long this week and lets see how the weekly candle closes. I might stay long another 10 days if things remain bullish. The first bullish cycle after a major bearish move is tricky and in the past I've taken profits too early so I'm trying to remain patient.

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It's been a LONG time since we've been bullish but cryptos LOVE to form ascending triangles when they go on bull runs. Watch to see if this thing gets strength and breaks out with volume. If it does then I will add a leveraged long on the retest of the breakout with a stop below the 2nd to last touch of the triangle. I'll try to update it if it happens.

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If I was awake last night and saw that price action, it would have been clear we had another rejection at highs that we weren't likely to break up. They just swept the highs and now are coming down to sweep range lows. The only question is whether they are going after $3870, $3830 or $3780

Im taking a long here on this candle at NY open my bigger add is $3830 and my big add is at $3880. I've got plenty of room to let this trade work.

There is resistance here, but I just don't see a situation where this doesn't make another move up. It would be extremely rare to get that type of price action then hit a brick wall. This all looks like healthy consolidation and a way to bait people into shorting this structure.

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OK. This is day trade, so be careful.

But just wanted to show an example. I really want to get long and can't really add to my long swing trade unless we go lower. But.. I believe we have a good risk reward situation here so I took a long trade at $3920 xbt. Why

1. Built a range with an ascending triangle
2. We've tested and held the range equilibrium (dashed line)
3. Held the triangle trendline
4. Swept the lows from yesterday
5. Good buying wick

On this one, I put a stop below the wick as that would invalidate and I'd look to go long at lower prices. I like the price action here enough that its worth a shot as long as this wick can hold.

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Winner, winner, chicken dinner!!!

Stops at break even but looking for $4100 minimum. May add on a retest of breakout.

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Took 50% profits on Day trade at $4100. Still holding my original swing trade long.

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Its always good to take a step back on Sunday and look at the weekly.

Thats a nice candle. Good volume, confirmed a higher low and had a wonderful second test of the weekly 200 MA.

Now we are at resistance on day 17. With this set up I think breaking the orange resistance lines and sweeping those highs for liquidity is more likely than getting stopped right here.

Right now, all price action is very bullish including alt coins. We are about 3-7 days from the time I look for a top, but after such an aggressive move down from $6000, and last cycle ending up more of an accumulation, this is really set up to be a 25-30 day cycle. And its possible this could be a right translated bullish cycle that goes longer than 30 days.

Also, once we get over this $4300 area, there isn't much resistance, so I think we could very easily make a strong move to the 200 DMA around $5000.

So the plan here is to just watch and see how price reacts and wait for signs of weakness before I sell. Thurs-Sat this week and I will probably start taking some profit, but I want to be careful that I don't miss out on that 200 DMA move if we get it.

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This is a bad sign, but its too volatile to make a decision.

I have an emergency take profit at $3600. If we fall below that point, then the damage is too severe. Otherwise, I'm looking at the reaction. If we just grind sideways the rest of the day and don't recover with a nice wick, I will close my position.

Unfortunately, even though I didn't expect this, I know that this could very well have been the cycle high and if we get follow through to the downside, it could get really bad.

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I do not like the price action. Very weak so far. I am cutting 50% of my position. Usually if we would get a recovery, we would have built it up higher by now. It looks like it wants to retest lows or go for $3660.

I have some profit. I'll wait to see how the next 8 hours goes. But if we close under $3800, the weekly candle gets bad. And if we don't get a reversal tomorrow, I think we are in trouble. Unfortunately, no place to take a short. Will have to wait.

If we end up recovering and building support then I'll look for short term longs.

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This isn't a prediction of what will happen. Right now I have no clue what happens. Might get a big red candle tomorrow. Might get a big green candle.

But what I THINK is most likely is that we chop in a wide range between $3600 - $3900 this week.

I think there is a good chance we'll see something like this. Some kind of range here and likely we'll get more of those choppy stop runs, so don't put any stops near any local structure.

If that was big money that wanted to move down then they will want to load up more shorts. Also, late bulls will try to bring this back up. People will be ripe and ready for more of these wicks.

Even though I think we could retest $3900, I wouldn't long it right here. if enough panic sellers give up, we could still fall further. A red candle tomorrow below $3600 and you want to get out of the way, but we'd also be too far down to short so you just have to wait for things to clear up.

IF you really want to try a long, wait until $3660 and put a stop at $3600 and eat the stop if it goes under. That way you aren't risking much. Under $3600 and there is some major technical damage done, especially if it happens in the next 2 days. You just have to take it and do nothing, even if we somehow recover.

If you really want to short, I'd wait until the end of the week. See if we don't chop around. See if you can get a fill around $3900-$4000.

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Here's a more detailed view.

I think we are going to head to $3900 now. But I wouldn't be surprised to see a quick move above $3800 that gets sold then a fakeout move to $3650 before we go back up. I would expect fakeouts both ways.

I have a small long right now. But I'll get rid if it if we don't see a move higher this morning.

I am a buyer again if we go right to $3650.
But my goal is to get short at $3900 area. That is when I will open a new TV post.

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That green shaded area is what I want to see and where I'll get into short positions. If we clear that area and make it support then I'll end up getting stopped out and I'll look for shorts higher. Its going to be past day 20 soon, so the focus needs to be on getting into a short swing trade.

If we end up making new highs, then it happens without me. Bear market trend and a nasty candle like that tells me to not to go after more longs on a swing trade.

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After the big move down, you would normally see more follow through. Instead we chopped around for a week and then dropped below the range low at $3750, formed a rounded bottom and now created support at the highs before the drop (blue line).

1. Bullish Case - I'm looking to see us keep trending. We've consolidated enough so if the $3660 is a reversal it should continue to trend like late February. Also, notice some alts look really bullish. LTCBTC looks great and other charts show bullish patterns so this adds to the potential bullish case.

2. Bearish Case - We stay under the red shaded area for several days and run out of buyers. The longer we stay under the more bearish I get.

I'm very neutral right now as short term looks bullish but we are in a bear market until we prove otherwise. Bulls have been fooled time after time, so still must be cautious. But I'll say that this is really a nice bullish set up if buyers can step in.

It's day 28, so this next move is critical. If bitcoin can make new highs going into day 32+, then we have a right translated cycle, the first one since 2017.

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Here is a short term trade. I ended up taking a trade at $3820 long when we tested support again and bounced up. But its a small position. I really want to see lows swept here and give me a chance for a better long. We may not get it.

For longs, we might just consolidat and take another stab at $3900. We had a rejection but the last 2 hourly candles are holding.

To be bearish we would fall below $3800, close 1H candles below and then get consistent selling after closing and have trouble getting back over $3800. In that case, I'd look for some kind of resistance to form and short it.

Today I'm looking for longs, but I'm ready to flip if we don't see bullish price behavior. Tricky markets.