Bitcoin: 14K Support Test This Week?
Updated
Bitcoin has established a lower high just below the 22K resistance zone and is poised to close below 20K by tonight's weekly close. While price action is slow and appears to be out of play, the bearish factors cannot be ignored. In this report I will share potential scenarios that can unfold in the coming week.
Earlier in the week, Chairman Powell had a speech and Bitcoin attempted to produce a bullish reversal signal (see bullish pin bar on the 29th). In those situations, momentum should follow through, but instead, bearish price action continued into Friday. This further confirms the weakness in this market. There is NO reason to be long or be optimistic about higher prices any time soon. This is not an opinion, this outlook is based on two factors: price structure AND economic environment.
While it is possible to have bear market rallies, they have very little potential and sustainability. Price could not even reach the 22K MINOR resistance zone in its previous rally attempt. Lower highs often lead to lower lows and not only is 17K likely to be tested this week, but a break is also favored by the current structure. A break of 17K can take price into the 14K area which is the next historical support zone. And in light of the current environment, bearish catalysts are more likely to appear and have more of an effect than any bullish catalysts.
Is shorting a good idea now? For day trades, sure because if there is a squeeze you can exit quickly for a small loss. For swing trades, the risk is too high at this location. While price is not favored to rally, it is still closer to a minor support. The probability is low but an irrational squeeze can appear out of no where and take price back into the 22K resistance. Are you willing to take that chance? While swing trade shorts are favored, I would consider them to be aggressive at these levels.
A more conservative scenario would be to see price break 17K followed by a retest of the 18 to 20K area which would be the new resistance to evaluate for positions.
Its not about forecasting the next move, its about preparing for potential scenarios, and then letting the market come to you. You can't react, you have to anticipate and that begins with good preparation. Good preparation is rooted in objective analysis. Analysis and trade decisions are NOT the same process. How would you describe your analytical process?
Thank you for considering my analysis and perspective. I hope you find it helpful.
Earlier in the week, Chairman Powell had a speech and Bitcoin attempted to produce a bullish reversal signal (see bullish pin bar on the 29th). In those situations, momentum should follow through, but instead, bearish price action continued into Friday. This further confirms the weakness in this market. There is NO reason to be long or be optimistic about higher prices any time soon. This is not an opinion, this outlook is based on two factors: price structure AND economic environment.
While it is possible to have bear market rallies, they have very little potential and sustainability. Price could not even reach the 22K MINOR resistance zone in its previous rally attempt. Lower highs often lead to lower lows and not only is 17K likely to be tested this week, but a break is also favored by the current structure. A break of 17K can take price into the 14K area which is the next historical support zone. And in light of the current environment, bearish catalysts are more likely to appear and have more of an effect than any bullish catalysts.
Is shorting a good idea now? For day trades, sure because if there is a squeeze you can exit quickly for a small loss. For swing trades, the risk is too high at this location. While price is not favored to rally, it is still closer to a minor support. The probability is low but an irrational squeeze can appear out of no where and take price back into the 22K resistance. Are you willing to take that chance? While swing trade shorts are favored, I would consider them to be aggressive at these levels.
A more conservative scenario would be to see price break 17K followed by a retest of the 18 to 20K area which would be the new resistance to evaluate for positions.
Its not about forecasting the next move, its about preparing for potential scenarios, and then letting the market come to you. You can't react, you have to anticipate and that begins with good preparation. Good preparation is rooted in objective analysis. Analysis and trade decisions are NOT the same process. How would you describe your analytical process?
Thank you for considering my analysis and perspective. I hope you find it helpful.
Note
I just wanted up provide an update for this article now that we have the market's answer: While structure has not changed, price is NOW testing the 22K resistance. This was a possibility that I mentioned in this article originally as a warning to people considering swing trade shorts at the 19K level.
Watch the 22 to 24K resistance zone for new sell signals. IF current candle closes as a bearish pin bar from THIS location, and takes out the low, that would be a sell signal.
I don't call specific trades for the sake of calling a trade. Criteria has to be met. No criteria, no trade anyone claiming to be a professional should know that.
I provide analysis here for people to gain perspective, REALISTIC expectations, along with have some point of reference for risk.
Never argue with trolls. They aim to instigate conflict and gain attention for whatever reason. Instead of arguing, if you feel they are compromising your learning experience here with nonsensical comments (like I'm a manipulator of Bitcoin, that would be great if it was true). then flag the comment and report to a moderator. It is in your own best interest to police the community and keep the standard of the learning high.
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