As I suggested in my Bitcoin Long Play idea at $6500, the market would shoot up fast, squeeze shorts and wouldn't provide a pullback to buyers. Still, I was looking for some kind of pullback on April 21st that never really happened. We got a shallow pullback to $8700. At some point this move up will need a larger correction.
This chart is comparing bitcoin today to bitcoin 2014. Yes, its a totally different game now. My point is not to say that bitcoin has to follow the 2014 price action.
IMPORTANT: My point is to say that as a trader, you better be ready for something like this to play out.
Unfortunately markets that don't pullback are not healthy. Smart money supports the market. They have the capital help drive price higher or lower. In a strong bull market, they will not chase prices higher. They set orders below price level and let the market come to them. That's why pulling back and testing prices is the ideal way to build support. It creates a strong bullish channel.
So I believe that much of this current price action is FOMO buying. In the long run buyers are buyers, but bitcoin will need to pullback and build support, then big money to step in and buy.
I'm currently short but so far this morning, price action has stayed near highs and forming a smaller ascending triangle. So we may see another attempt to go over $10k. FOMO can take price much higher, so I'm not fully convinced that $9800 is the top. Just think we are close. If I get stopped out my next target is around $10500 to take a short.
At $10800 I will close that short. If we get above $10800, I will stop shorting and re-evaluate because we'd be too close to $11700. Even though I'm looking for a top now, I realize that sentiment is strong enough, it can take hold and take us much higher. I think if we get to $11700 then we'll go to $13k. So at that point, I'm likely considering a full bullish scenario.
What happens if we go down from here.
1. We pullback to test the $8100, build support and go up. This would get me bullish, especially if we stayed around the $8k area for awhile.
2. We continue to slowly move down and eventually make new lows.
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Keep in mind, that I am a long term bull and have a price target over $100,000. I've also been long since $6500 so I'm not just a bearish trader. I do trade long and short and just happens that short trades have been better plays since December. I want to see bitcoin turn fully bullish and if we can continue this path, build some support and keep moving higher, I will become a bull. But I believe its more likely that bitcoin falls into a sideways price action for a few more months before its ready to take that next move up.
This chart is comparing bitcoin today to bitcoin 2014. Yes, its a totally different game now. My point is not to say that bitcoin has to follow the 2014 price action.
IMPORTANT: My point is to say that as a trader, you better be ready for something like this to play out.
Unfortunately markets that don't pullback are not healthy. Smart money supports the market. They have the capital help drive price higher or lower. In a strong bull market, they will not chase prices higher. They set orders below price level and let the market come to them. That's why pulling back and testing prices is the ideal way to build support. It creates a strong bullish channel.
So I believe that much of this current price action is FOMO buying. In the long run buyers are buyers, but bitcoin will need to pullback and build support, then big money to step in and buy.
I'm currently short but so far this morning, price action has stayed near highs and forming a smaller ascending triangle. So we may see another attempt to go over $10k. FOMO can take price much higher, so I'm not fully convinced that $9800 is the top. Just think we are close. If I get stopped out my next target is around $10500 to take a short.
At $10800 I will close that short. If we get above $10800, I will stop shorting and re-evaluate because we'd be too close to $11700. Even though I'm looking for a top now, I realize that sentiment is strong enough, it can take hold and take us much higher. I think if we get to $11700 then we'll go to $13k. So at that point, I'm likely considering a full bullish scenario.
What happens if we go down from here.
1. We pullback to test the $8100, build support and go up. This would get me bullish, especially if we stayed around the $8k area for awhile.
2. We continue to slowly move down and eventually make new lows.
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Keep in mind, that I am a long term bull and have a price target over $100,000. I've also been long since $6500 so I'm not just a bearish trader. I do trade long and short and just happens that short trades have been better plays since December. I want to see bitcoin turn fully bullish and if we can continue this path, build some support and keep moving higher, I will become a bull. But I believe its more likely that bitcoin falls into a sideways price action for a few more months before its ready to take that next move up.
評論:
When price breaks to new local highs, you want to see movement with some conviction. Ideally, you get strong buy volume, shorts covering and then form flags that break up.
We broke above $9900 but so far there isn't a lot of follow through. It's not too late as we can still see a big volume move up, but the longer we hang out here the more chances are good that this move has a pullback before going higher This alone is not a reason to short, but it ads to a confluence of other reasons.
When price breaks to new local highs, you want to see movement with some conviction. Ideally, you get strong buy volume, shorts covering and then form flags that break up.
We broke above $9900 but so far there isn't a lot of follow through. It's not too late as we can still see a big volume move up, but the longer we hang out here the more chances are good that this move has a pullback before going higher This alone is not a reason to short, but it ads to a confluence of other reasons.
評論:
And we can see the result of weak price action was a drop. That doesn't mean this is the top. We have to see follow through. I drew a line at $9860 where price struggled to get agove earlier. If it goes back over that, then I would expect bulls to take another shot at $10k.
I'm holding a short and will put a partial stop there. If it goes higher, I'll look to enter another short position.
And we can see the result of weak price action was a drop. That doesn't mean this is the top. We have to see follow through. I drew a line at $9860 where price struggled to get agove earlier. If it goes back over that, then I would expect bulls to take another shot at $10k.
I'm holding a short and will put a partial stop there. If it goes higher, I'll look to enter another short position.
評論:
I did get stopped out of a part of my short being cautious at $9860. However, the market turned and we got the red scenario. If we hold near lows today, I will look to add to this short position.
I did get stopped out of a part of my short being cautious at $9860. However, the market turned and we got the red scenario. If we hold near lows today, I will look to add to this short position.
評論:
Bitcoins hanging out near the lows. Bounce has been weak so far so its likely going lower. The 4-25 daily candle was our last potential topping candle. It came down during US overnight hours had a weak bounce then made a lower low at the end of the day. Looked like it would head towards a correction.
Then it went sideways the next day before recovering at the end of the day and eventually turned into that long consolidation.
So we really won't know much until we see how price reacts early next week. Seems like a test of that trendline is in order. Price had reacted off the $9200 level quite a bit so expect some buyers and sellers in that area.
Bitcoins hanging out near the lows. Bounce has been weak so far so its likely going lower. The 4-25 daily candle was our last potential topping candle. It came down during US overnight hours had a weak bounce then made a lower low at the end of the day. Looked like it would head towards a correction.
Then it went sideways the next day before recovering at the end of the day and eventually turned into that long consolidation.
So we really won't know much until we see how price reacts early next week. Seems like a test of that trendline is in order. Price had reacted off the $9200 level quite a bit so expect some buyers and sellers in that area.
評論:
So we go back and look the support line and that is exactly where we picked up buyers. So its quite possible a short term low is in right here. I still think we might test the trendline just below.
Breaking $9400 would suggest that this downmove will retrace. If it retraces more than 65% I would be surprised and more then .786 I would expect price would be ready to break through $10k. I do not expect that to happen.
My expectation is a bounce at any time that goes downs then eventually falls through $9000.
So we go back and look the support line and that is exactly where we picked up buyers. So its quite possible a short term low is in right here. I still think we might test the trendline just below.
Breaking $9400 would suggest that this downmove will retrace. If it retraces more than 65% I would be surprised and more then .786 I would expect price would be ready to break through $10k. I do not expect that to happen.
My expectation is a bounce at any time that goes downs then eventually falls through $9000.
評論:
Bitcoin has hit that bottom parallel channel, pierced it but held at support. So far the bounce has been weak, so I would expect it eventually falls through.
There really isn't great support in this area. The huge support area is between $8800 and $9000 and this would be the area I expect to test and the most likely area to get a bounce.
I still believe that the bounce will be a short term trap that will simply form a lower high before going lower.
Bitcoin has hit that bottom parallel channel, pierced it but held at support. So far the bounce has been weak, so I would expect it eventually falls through.
There really isn't great support in this area. The huge support area is between $8800 and $9000 and this would be the area I expect to test and the most likely area to get a bounce.
I still believe that the bounce will be a short term trap that will simply form a lower high before going lower.
評論:
We hit the support area. Even though it looks dangerously scary, I expect it a bounce somewhere in here. It wouldn't be uncommon to test that head and shoulders neckline.
I think it will consolidate between $8650-$8900 but as we often go up on weekends, I would expect we go up higher. I've covered part of my short for now.
Normally at this stage in the bull market we won't see major crashes down so I tend to cover more of my position and more often.
We hit the support area. Even though it looks dangerously scary, I expect it a bounce somewhere in here. It wouldn't be uncommon to test that head and shoulders neckline.
I think it will consolidate between $8650-$8900 but as we often go up on weekends, I would expect we go up higher. I've covered part of my short for now.
Normally at this stage in the bull market we won't see major crashes down so I tend to cover more of my position and more often.
評論:
I feel like a broken record but if you go back into all of my past analysis I constantly say the same thing. Markets that go up without pullbacks and without consolidation never build support and risk these monster sell offs.
For now we are getting extremely oversold even on the 4 hour so we could really find support anywhere and it could be a fairly good bounce. We often go up on weekends, so I think we'll bounce at some point here and maybe test the neckline again. But eventually this HS target around $8k seems more likely than not.
At that point, I think this wave down will complete and we'll have a good rally. I'll create a new post at that time.
One thing I do want to say is that I do not think we will crash here. I think this market will go down at a slower, flatter pace with selloffs and strong rallies that chop up both bulls and bears.
I feel like a broken record but if you go back into all of my past analysis I constantly say the same thing. Markets that go up without pullbacks and without consolidation never build support and risk these monster sell offs.
For now we are getting extremely oversold even on the 4 hour so we could really find support anywhere and it could be a fairly good bounce. We often go up on weekends, so I think we'll bounce at some point here and maybe test the neckline again. But eventually this HS target around $8k seems more likely than not.
At that point, I think this wave down will complete and we'll have a good rally. I'll create a new post at that time.
One thing I do want to say is that I do not think we will crash here. I think this market will go down at a slower, flatter pace with selloffs and strong rallies that chop up both bulls and bears.
評論:
I am covering all of my short from $9950 here at $8530 right now. It can go lower, but we could get a good bounce at any time. I'll actually look to scalp some longs then look to rebuild the short at higher prices.
In these situations, I start small and then just add to my long every $100-$200 drop until the 4 hour RSI gets some relief.
In these situations, I start small and then just add to my long every $100-$200 drop until the 4 hour RSI gets some relief.
Bitcoin consolidated and formed an ascending triangle yesterday. I had a fairly large short at $9800 area but I cut it in half and moved my stop down to break even and was stopped out.
Normally when an asset consolidates like that you will see a high volume break up. So far we got a small volume break and now a low volume grind higher. This type of price action is bearish UNLESS we quickly see a big volume spike higher. I've been waiting for it all morning, but since I haven't seen I'm re-entering a short position $9950.
My stop though is super tight just above $10k.
Bulls need to break this zone with volume and conviction. A big volume spike to $10k can happen at any time and you can even say its more likely we get a spike and if it does get past resistance, it could easily run to $10500, so thats why I have a tight stop. But risk vs. reward here is excellent
Essentially I'm looking at a scalp setup that I'm hoping to turn into a swing trade if price action justified keeping the trade on.