My current trading plan; detailed rational
Updated
This is how I am playing it. Not advice; I just put stuff out to keep myself honest for post-hoc analysis.
The plan it in the chart. I am waiting for a break of a trigger to execute.
To arrive at this point, I started at the monthly where I see a long term support and resistance channel structure with reactions at the channel center as well. C19 selloff had price action breaking the lower support, and BTC didn't take off until it broke above (right at the same time it was testing ATH). As you can see, we are sitting on that long term support.
Zooming in to this most recent cycle and taking a look at the fibs, a full 4.236 extension would take us out to the mid 70's
Then if we look at the fractal from the 2013 cycle, there are many beautiful alignments with levels and structure. This chart is why I think we are repeating this cycle rather than the 2017 bull run. It just nails the price action and several of the key levels, and several of the key levels are realized at the intersection of the top and bottom of the long term channel as well. A full completion of this fractal would take us out to 80k
Now zooming into recent action on the weekly. BTC is sitting inside a confluence of levels and trying to sort it out
A quick look at the daily is next. Prior weekly lines still on the chart. A full 4.236 extension of the most recent capitulation event would take us to the low 80k region. Also note that price action has been range bound between those weekly levels (yellow lines) for the past 6 days. This is setting them up to play a role in setting the trigger and stop loss levels.
Lastly, at the intraday, 4h chart, BTC is starting to sort it's way through that confluence of levels by forming a nice wedge pattern. A break up from this would trigger my trade with a hold to the upsides set by the longer timeframe analyses (which would also complete at the center of the long term channel center)
So that is my near term trading strategy in a nutshell, what is yours?
The plan it in the chart. I am waiting for a break of a trigger to execute.
To arrive at this point, I started at the monthly where I see a long term support and resistance channel structure with reactions at the channel center as well. C19 selloff had price action breaking the lower support, and BTC didn't take off until it broke above (right at the same time it was testing ATH). As you can see, we are sitting on that long term support.
Zooming in to this most recent cycle and taking a look at the fibs, a full 4.236 extension would take us out to the mid 70's
Then if we look at the fractal from the 2013 cycle, there are many beautiful alignments with levels and structure. This chart is why I think we are repeating this cycle rather than the 2017 bull run. It just nails the price action and several of the key levels, and several of the key levels are realized at the intersection of the top and bottom of the long term channel as well. A full completion of this fractal would take us out to 80k
Now zooming into recent action on the weekly. BTC is sitting inside a confluence of levels and trying to sort it out
A quick look at the daily is next. Prior weekly lines still on the chart. A full 4.236 extension of the most recent capitulation event would take us to the low 80k region. Also note that price action has been range bound between those weekly levels (yellow lines) for the past 6 days. This is setting them up to play a role in setting the trigger and stop loss levels.
Lastly, at the intraday, 4h chart, BTC is starting to sort it's way through that confluence of levels by forming a nice wedge pattern. A break up from this would trigger my trade with a hold to the upsides set by the longer timeframe analyses (which would also complete at the center of the long term channel center)
So that is my near term trading strategy in a nutshell, what is yours?
Note
Forgot to include the BTC/gold chart is giving extra hints of a move to the upside as it looks like a clean back test of the prior ATHNote
quick update to include another potential support line in the mix (50 week SMA)Note
7/15: still waiting for the setup to trigger. I thought it would also be good to document my invalidation criteria. I will switch to a bearish outlook, and look for short setups if the long term channel is broken on the longer timeframesNote
had a weekly close below the long term trend line (shown above). Still respecting the long term SMA. Trading still inactive as I wait for this sloppy section to sort out.Note
Weekly update The BTC chart continues to live on a knife's edge. The weekly candle reclaimed the entire zone and managed to close above both yellow resistance lines derived from the weekly chart and the white resistance trendline derived from the monthly chart. This is keeping my macro thesis alive for at least another 6 days (till the next monthly close). I did change my trigger based on the recent price action and am still inactive on BTC as I want further confirmation before jumping in. Patience is needed in this moment even though the emotions are screaming.
Trade active
puled the triggerNote
not much to report lately, BTC is looking strong, my trade is rolling and there are several battles through resistance left. Next boss is the 20W SMA. I am feeling nice and chill and wont get antsy until we see 50K+Note
quick update, the retrace is respecting fib levels all the way back up. Trade is still active.Note
the 20W boss has been slain. IMO, if it holds on this back test, we are set for a nice move upNote
Trade still active and coming along nicely. That little dip may have been close enough to test the 20 week SMA for a back test, and it is pushing off from the 20 day SMA (blue) now with 2 strong daily candles. This is actually the time when I start getting nervous. There could be a strong rejection from any of the 2 remaining fib levels (green). This would be normal, but would require deeper analysis to see if it was a reversal or continuation.Note
Trade active
BTs just gave my 'area to watch' levels a kiss, no strong rejections, just a slow down and consolidation for the past couple of weeks. I said before that I would get nervous around 50k and I am because this is the time of decision. Either up and out, or the end of a dead cat. My bias is up and out, particularly looking around at other alt coins and the total market cap, which are looking very strong right now. Trade active
got that strong regection from the final fib levels (green) that we talked about on Aug 20, and this pushed btc all the way back down to (and a wick through) the 20W SMA. This is also the beginning of that backtest we talked about on Aug 12th. Holding my breath and watching the daily closes. 2 daily closed below the 20W and I will liquidate, else I am in it till my targets are metNote
Trade active
BTC is now in the middle of the back test of the 20W we talked about in the last update. The question on my mind now is if BTC wants to consolidate a bit more and double tap the years-long support line (white) before the next leg to my take-profit line of if it is ready to go.Trade active
strong bounce on a nice back test of the 20WSMA (green) and the monthly resistance line (white), and it is already to a new higher high. Looking good.Trade active
another month has passed and there has been a slow grind upward toward the target zone. We are flirting with it now, just got a couple rejects off the channel centerline. If there is another move up, I will start laddering out.Trade active
well that sucked, but the long term trendline that has been providing support for this entire time came into plain again. BTC found (temporary) support there, and I will be waiting to see what happens this week and next. As per my trading plan, I will liquidate my position at 2 weekly closes below that line. For now though, trading is active, chart remains intact but I am watching weekly closes again.Trade active
Two weeks have passed...one weekly close below the trend, and the weekly close that just came in reclaimed the long term trendline, but just. Trading is still active but I am still watching this closely at the monthly and yearly closes that are coming in next week. Chart still intact and unchanged for 6 months so far.Note
Trade closed: target reached
the December monthly closed below the major trendline. Per my trading plan, this trade was closed out. 33% gain in this swing trade. From here on out I am looking for strategic entries on Bitcoin. Trade active
BTC is at a confluence of support: our prior weekly line (yellow) + the 20M SMA (red). I took an agressive entry here and will look at the weekly close on Sunday. If we close above the 20M, I will re-enter fullyTrade active
the above played out, so I am back into the market fully. BTC holdings increased by 30% through this sell and buy back in. Next target is in the chart below. The last ATH was close enough to my top targets, so I am looking for a retrace in this trade.Trade active
Monthly close for Feb. is on track. chart intact no changesNote
btc aparently wants to sit on the 20M SMA. This is one of my invalidation criteria. If I see a momentum candle or a couple daily closes below it, I will be getting out. Otherwise it is patience and strong fortitude times.Trade active
note for posterity: the entire market, bitcoin included, seems to be living right on the edge, and staying on the edge. BEC still rides the 20M SMA (red)Trade active
another couple of weeks gone and BTC has been generally up. The next thing I am looking for is the 'squeeze play' between the 20M SMA (red) and 20W SMA (Green). These are the same averages I have been using the whole time, and it is interesting to see them both come into play. My action: nothing, waiting to see which one wins.Trade active
weekly close came in with a bullish breakout. I think there will be some sideways action now, but still holding, no trades, chart remains intact.Trade active
next weekly close in, and we have a nice wick down to back test the 20WSMA and the prior resistance zone. Chart healthy, I am still holding and sticking to the plan.Note
Trade active
the 20M SMA is coming into play again with the weekly close coming in just above. Current week has dipped below, My invalidation criteria i a weekly close below it, so we are close to. Until then, I hold on.Trade active
it isn't pretty, there was a weekly close below the 20M SMA (red line), and here on the daily, we are still below it 2 days later. My feeling is that this is a fake out, and will wait to see the monthly close in a few days before taking any action. Note
the chart below is why I use the 20M SMA as my line in the sand. The 20W sma crossing below the 20M sma has signaled a more than 50% crash in a single month. History is now repeating both in timing and potentially magnitude (we will see about the magnitude of the drawdown as it plays out)
Note that the target from this less conventional analysis lines up with a backtest of 2017 ATH and of the 200W moving average, both of which are more conventional indicators for this type of crash
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