Short Bitcoin Into Cycle Low

I really held onto this last long position for a long time thinking we were in a good position to move up and have our first cycle high. But this move since the big drop on February 24th just looks like a choppy range. And despite a big drop and impressive recovery on March 4th-5th, we now have gone 5 days sideways, losing the power of that initial momentum. And we consistently get met with heavy selling into this major resistance zone consistently getting rejected.

I played around with a small short at that orange line. The green line is a long term trend line I can show in another chart. If we have a jump up a bit more I'll add to my short. I would stop out of this at $3950 1H close because breaking that at this point would set up a move to new highs, which was originally what I was looking for and even hoping for on March 4th.

But at this point, failing to get past this area for 2 weeks without breaking this area is just not bullish and more likely we go a cycle low due in about 2-3 weeks.

註釋

Thats the green line. We jumped over it fooling a lot of people at the end of $6000 range, even testing it before the big drop. But this appears to an additional area. Breaking this would be huge which is why I will pull this short position if we get a close over $3950 and I'll have a $4000 emergency stop.

註釋

3 days later and we are riding this trendline. Failing to so far to get any closes below $3800. Last few days have been choppy and still holding.

Time is important. When we were hanging at $3900 and not breaking up, I shorted. But now we break down and can't get any momentum. Looks like a potential build up.

I do not want to necessarily long here either. Too late in the cycle and we could still break down. I'm just concerned that we started a move down 3-4 days ago and we are still over $3830. So I'm going to take profit on part of my short and wait and look for a better entry higher. Possibly a spike up over $3950 or maybe hit the .79 retest near $4000.

Otherwise, its much safer at this point to wait for us to break below $3800 and then look for a new entry.

I hate to flip flop but this is a horribly choppy sideways market with no clear direction so I'm taking profit more frequently and waiting for better set ups. Its better if we break down and I find a new entry as I just don't think this market is going to run away.

註釋

As I said in my last update. We never broke down $3800 other than a quick wick. I never got into another short and didn't long it other than a few very small day trades. The failure to break down this late in the cycle was concerning.

For every bear cycle we generally lost momentum day 15-25 then had aggressive moves down. It looked like it was happening again a few weeks ago but short term got bullish and now we have a move over the $3930 range that is holding.

Too many conflicting signals. Very difficult to trade. Lots of choppy wicks. But ultimately we held range lows, broke over range highs. We have a series of higher highs and higher lows. We are holding this current short term bullish move near highs.

This chart is set up for a right translated cycle that tops after 30 days. Likely around day 40-45. Even though $4100 has been resistance, we've been there a lot so that resistance is ripe to break down. And the 200 DMA up at $4800 is so close. Its what I was looking for at the beginning of the cycle.

So for the time being, I am neutral. Not short, not long. Too many bullish factors to short right now. I'll add the bearish case here in a minute

註釋

LET ME STRESS: I am not short anymore. I am not long either. And right now, I favor more bullishness short term. I believe its more likely we go above $4300 than not. That is today 3-16, but this market changes fast.

The last time we had a strong move up, a big drop, long consolidation in January you can see we made a big bullish move the same way. And yes, everyone was super bullish then (including myself).

We moved up to the 79% area, got some distribution and collapsed. I'll be eyeing price action to look for weakness in coming days. In the bullish case, we really need to see a continued tend and get some closes over $4100. That would be super. If we start getting a series of spikes into that zone that keep getting rejected, then be cautious.

Again, this is why I'm not in any swing trade position, but I will be keeping an eye on this type of set up in coming days. It gets more likely if we hang out here in this range for 3+ days without continuation.

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Mixed signals right now. Still no swing trade.

On the bullish side

1. We broke out of a 19 day range
2. We climbed up nicely
3. Come down and retested the breaker from 3 weeks ago
4. So far have moved away from that red breaker zone.

On the bearish side

1. Hit the 79% and rejected immediately
2. Came off $100 from friday nights low faily quickly
3. Volume doesn't look great
4. Move comes on weekend
5. The CME close was $3890 so it hasn't participated

After you spend 19 days in a zone, you really would expect a more powerful move up and you would hope to see us hold the gains a bit higher. Retesting the breaker at $3940 is not uncommon and so far we've moved away but I'd really like to see bitcoin get a 1 hour close back over $3990. Then we can see if it has enough juice to climb higher. If we close an hourly inside that red zone its a warning sign. Falling below $3900 is not ideal, even if its a spike.

If we fall back into the $3900 range, I will start thinking about a short. Back over $3990 on an 1H and I may make a small add to a daytrade, but still quick profit.

註釋

I wasn't' looking at this until I saw Eric Krown mention it this morning (good pro trader does daily videos, so look him up). But the CME hasn't participated in these past 2 rallies. So really need to see bitcoin move away and see the CME help drive price up in the next 24 hours. If we just fall back down as soon as CME opens, then I think its a very bad sign.

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Bitcoin held above the CME gap open and now grinding. We formed a small range at $4010, broke above it.

Its day 43 so less than 2 weeks would be ideal to make a cycle low. I don't think its going to go that far so I'm not going to take a big position. The fact that we are still fairly high after 43 days is a more bullish sign. In the least in represents some potential strength. Possibly a dip into the next daily cycle and push to the 200 DMA.

I started a new short at $4035 and will add at 4100. I think we can keep grinding for days. If we break that wedge structure or make a new cycle high I will get out. A new cycle high opens the door to higher price so won't short or stay in a short if that happens.

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Because of the timing, I think this is going to be a fairly shallow drop. And since its day 48, we can find a low at any time.

At this point, I'm looking at 2 areas. The red one that makes the most sense is $3500 area, where we run all the stops at the red lines and catch that trendline.

But I'm wary of the past range low holding around $3700 so I will look to take quite a bit of profit there and if we get a sideways grind I more likely to start a long and try to build a position between $3500 and $3700.

This is the most bullish cycle we've had since the bear market started even though it wasn't right translated. I'm expecting a higher low and believe this next cycle has a chance of testing the 200 DMA which should be around $4600. So I don't want to hang onto this short expecting $3500 when the upside is being long.