BTCUSD coming off the ETF hype and the run for the new All Time High has FAILED the breakout on the Weekly chart. Buyers did not have the momentum to give a solid close of the candle above the past ATH. Patient traders were resisting the FOMO and watching for the Weekly candle to close. This is a dangerous sign for long positions and an opening technical setup for a short position.What the false breakout candle does is create a well defined level at 68000 for trading:
- For traders that are unshakably bullish the new breakout level would be a signal to go higher
- For traders that follow price action it defines the risk for a short trade
Not once, not twice, not thrice, but four times in Bitcoin's history a major bull run has had a drawdown of -80% or more. It is not only well within the probability of this happening at some point but to be expected. Whether this happens from 67k down to 13k or 250k down to 200k it is the historical nature of Bitcoin. A retracement such as this could take 1-2 years and be marked by periods of high volatility. If you do not recognize this "you don't understand Bitcoin."
On the short side if risk is defined by the breakout level a trade down to the May 2021 consolidation levels presents an attractive 6-to-1 Reward/Risk. Targets could also be set for a -80% retracement for an even greater Reward/Risk. These would be "set and forget" position trades for the long term. Another way to play the False Breakout signal is to take on a bearish bias by looking for short setups on lower timeframes (I prefer this method) until price breaks the defined risk level above the latest ATH.
Anything can happen in trading so I have laid out both the bullish and bearish paths based on this signal. Do not ignore this price action no matter what your sentiment as it provides a rare, clear indication of where price wants to go.
Note
My favorite meme of the moment, so true...Note
For example right now on TSLA. This is what you want to see on a break of an ATH: a solid, confirmed candle close. Then you can get a real breakout rip...
"Be to others the person you needed to meet 10 years ago"
Discord Trading Community: discord.gg/eDfhKvS5AC
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Discord Trading Community: discord.gg/eDfhKvS5AC
Youtube: youtube.com/c/NoroksNotepad
Twitter: twitter.com/noroktrade
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
"Be to others the person you needed to meet 10 years ago"
Discord Trading Community: discord.gg/eDfhKvS5AC
Youtube: youtube.com/c/NoroksNotepad
Twitter: twitter.com/noroktrade
Discord Trading Community: discord.gg/eDfhKvS5AC
Youtube: youtube.com/c/NoroksNotepad
Twitter: twitter.com/noroktrade
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.