Bitcoin - Patience is Critical - You are Simply Guessing Now
Updated
Overview:
After an exciting weekend it appears that the Bulls get a fresh sigh of relief. One mistake that many new traders make is jumping in at this point because the sold out lower. This is why when the market is volatile the Best Trade is No Trade.
Technical:
We updated the shorter term 12 hour chart with minor support levels of 7998 and 7908. With the formation of the current bar it appears that buyers are not as enthusiastic as sellers and rightfully so. We need confirmation after a move in order to re position ourselves after a short squeeze which was not as strong as anticipated. When things do not go as anticipated, and this happens more often then not, we exercise patients and risk off. In order for us to be bullish we need a close and continuation above the minor resistance level of 8256 where we can target the next minor resistance level at 8884.
From the daily and mid term perspective, the trend line has held and we have a valid ABC corrective count which could imply that this mid term correction is complete and we move higher. Keep in mind there are other counts and when we are in a cycle we are simply making assumptions. We are assuming this is a midterm correction yet it could be part of a broader correction. With this in mind markets seldom move straight up and or straight down. The major support line of 7666 has held which is critical from a broader term perspective as a break of this level brings the area of 5865 to 6615 as the next level to look for a reversal. I want to be clear here the bulls are NOT out of the woods yet, but the bears are definitely not wearing comfortable shoes.
From a longer term perspective, which is the most important, little has changed. We have provided three different structures. Structure is important as we mentioned markets normally do not go straight up or straight down. As we seen this weekend emotions in the short term dictate short term direction. We could easily retest 13k' before pulling back to retest the previous low of 6000 or lower. This is the structure I believe forms IF we are to correct to these levels. However with how emotional this market, easily sentiment is swayed, and the lack of liquidity and institutional investors I believe the green path outlined is the more likely of the three scenarios posted. Please note these are guidelines and not google' maps. These are the types of structures we would normally see in a exponential corrective cycle.
Summary:
We do not want to make any impulsive moves here, we need to exercise patience and look for a high probability setup not guess the direction of the market. Quite frankly we would be guessing as it can move either way. This is why we use Technical Analysis as a guide to provide levels where we look for reversal formations and act accordingly. Reacting to the market on a shorter term basis will likely end up with portfolio erosion. With that said there are a few coins on our radar we are looking to trade and they will be posted elsewhere moving forward.
After an exciting weekend it appears that the Bulls get a fresh sigh of relief. One mistake that many new traders make is jumping in at this point because the sold out lower. This is why when the market is volatile the Best Trade is No Trade.
Technical:
We updated the shorter term 12 hour chart with minor support levels of 7998 and 7908. With the formation of the current bar it appears that buyers are not as enthusiastic as sellers and rightfully so. We need confirmation after a move in order to re position ourselves after a short squeeze which was not as strong as anticipated. When things do not go as anticipated, and this happens more often then not, we exercise patients and risk off. In order for us to be bullish we need a close and continuation above the minor resistance level of 8256 where we can target the next minor resistance level at 8884.
From the daily and mid term perspective, the trend line has held and we have a valid ABC corrective count which could imply that this mid term correction is complete and we move higher. Keep in mind there are other counts and when we are in a cycle we are simply making assumptions. We are assuming this is a midterm correction yet it could be part of a broader correction. With this in mind markets seldom move straight up and or straight down. The major support line of 7666 has held which is critical from a broader term perspective as a break of this level brings the area of 5865 to 6615 as the next level to look for a reversal. I want to be clear here the bulls are NOT out of the woods yet, but the bears are definitely not wearing comfortable shoes.
From a longer term perspective, which is the most important, little has changed. We have provided three different structures. Structure is important as we mentioned markets normally do not go straight up or straight down. As we seen this weekend emotions in the short term dictate short term direction. We could easily retest 13k' before pulling back to retest the previous low of 6000 or lower. This is the structure I believe forms IF we are to correct to these levels. However with how emotional this market, easily sentiment is swayed, and the lack of liquidity and institutional investors I believe the green path outlined is the more likely of the three scenarios posted. Please note these are guidelines and not google' maps. These are the types of structures we would normally see in a exponential corrective cycle.
Summary:
We do not want to make any impulsive moves here, we need to exercise patience and look for a high probability setup not guess the direction of the market. Quite frankly we would be guessing as it can move either way. This is why we use Technical Analysis as a guide to provide levels where we look for reversal formations and act accordingly. Reacting to the market on a shorter term basis will likely end up with portfolio erosion. With that said there are a few coins on our radar we are looking to trade and they will be posted elsewhere moving forward.
Note
This was posted on our article describing the trade breakdown. Note
It is critical to be patient as impulsive as it is to jump back in or jump back out. Currently we tested the 8393 level which is the 0.236 retrace of "C" leg. Finding support here is a good sign but we we are looking at the 8887-8944 area for signs of a reversal. I think it is premature to say we are reversing here however a test of the 8153 level would validate it. My strategy moving forward is this.
IF we pullback here I will be looking at the 8153 or 7804 levels for a reversal signal and I am watching the RSI along with one other confirmation. This is the area I will look to add long.
IF we continue higher, which I think is a good possibility, I am looking at the 8884 to 8944 level for a bearish reversal and pullback. This is ideally where I would want to add long as it would form a nice bullish structure.
We must be patient and let the market come to us not try and force a trade here anticipating we move higher.
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