BTCUSD update: Price has broken below the minor support around the 8400 level and has gone as low as the 7800 area. Is this market a short? I don't know about you, but I do not care how weak a market looks, I will not short a major support area.
I recently took a long swing trade on top of my longer term position at 8815 and got stopped out at the 8200 area. Why did I not hold it as part of my longer term inventory? The answer is I am looking to keep my risk under control. I still intend to get long again, especially around the current level, BUT confirmation must appear otherwise no trade.
I do not trade these markets on margin, so I cannot short. And like I have written previously, if I was able to short, I would like do it on a day trade time frame, especially within a major support zone that price is fluctuating within at the moment.
The 8093 level is where price is hesitating and I am not surprised since it is the most recent reversal zone boundary based on the 8271 low. On top of that, 7776 is another reversal zone boundary that is relevant to the 8342 low which price seems to be reacting to as well. Any bullish reversal patterns that unfold within this area, I will be looking to get into another swing trade long.
In summary, these are slow and increasingly indecisive markets. Price is having a hard time putting together a solid rally off of this major support level , but that does not mean it is going dramatically lower as many believe. Momentum is generally bearish and a major change will not be valid until the longer term bearish trend line is compromised (way up at 9600). This is why managing inventory in conditions like this can be more effective than putting on swing trades. I have enough inventory and only looking to take on more risk (swing trades) if the signals appear. Managing inventory means averaging into a position that you are comfortable with if the market goes back to the lows. Remember you want to buy when a market looks it worst, and sell when it looks its best. If price pushes the 6K low, I will be looking for a failed low opportunity to buy as well.
Hi Mark, managing inventory sounds like making a virtue of a necessity... in hindsight, wouldn't it have been better to sell your positions, even with say a 10-15% loss around 11000 level, to re-enter between 6000 and 7000 where we are headed ? In hindsight everybody is a genius, right? well, yes, but I for one have always been convinced we would get back down to test these levels (and possibly go even lower) and sold 50% of my BTC position at 11000 and another 40% when it broke below 9800 taking a loss... ouch, that hurts, but now I have about 10400 USD for every BTC I have sold, which means that if I were to buy now I'd get 1,3 BTC for every 1 BTC I sold... so the 10-15% loss I took when I sold, would turn now in a 15-20% profit supposing BTC starts to go up from here... add to this the benefit that I'm not stressing at all about inventory management... one thing I have learned in 30 years of trading is that when a trade turns against you and crosses a limit you had identified before, I mean when you entered into a position, as invalidating your trade, it's better to cut your rottenting finger rather than letting it fester and risk loosing your arm.
@EtherSwinger, yes, a stop loss, although if at all possible I prefer to apply it manually rather than set it automatically because market makers love to tank prices just enough to run the stops and then push the prices higher. But if I know I won't be able to follow the markets, then I will set it automatically.
stanhasit
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Mark,
Thanks for all of your input, I really appreciate it. I have a request, could you take a look at the shorts chart for BTC/USD and give some explanation as to what is going on there relative to BTC/USD prices please? I'm no expert but the spikes in that chart are quite extreme and obviously very much relevant to the BTC price. As BTC is the barometer for the entire cryptocurrency market I often use your analysis in that respect and I really would appreciate your ideas on this particular aspect of the ecosystem as I believe this is one part of the market that is not covered in great detail.
Thanks....
Hans_Sev
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Hi Marc, Thanks a lot for all of your work. I follow you daily since last year and bought your e-book yesterday. I really like your clear style to put out TA.
Thanks again and all the best.
Jazz-man
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When the death cross happens btc will fall and bottom out to the next trend line around 1800. Altcoins will follow. Eth 165. ltc, 35. Bitcoin adoption has failed, New tax laws, google search fell 60%, market cap diminished. Transaction Energy cost too high. Imploding. To many shitcoins and hardforks. Buy back after the daily 50ma crosses the 200ma back over. Wounds take time to heal. 2014 repeat.
angula
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@jazzman4u, sorry mate, but what you wrote is more drama than anything else.
Jazz-man
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@angula, Well brother. Give me your 2018 forecast and lets compare notes when its over.
kenzboard
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@jazzman4u, yep
dwk8081
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This just out ... there was a time when the words "Coinbase" + "Adds (whatever)" would make the coin rocket ...