BTC - Bitcoin Falling to $32,000! Or Will It Fall Lower?
Updated
Bitcoin completed its measured move from the breakout at $31,800, to $37,800 and reached its peak at $48,900! As expected, we witness a sell signal at this level, indicating that the bull run is over. Should we short or long?
How do we trade this? 🤔
My last analysis began just after the confirmation bar closed after the sell signal that wicked at $48,900. This analysis called for a short to just above the trading range support at $38,350:
That short has come and gone, there is not enough area left to short without placing too much initial risk on the trade. It is still reasonable to short on lower timeframes like the 5m and 15m chart, but not the 4HR and Daily as we're doing here. We should be looking for long entries in the Trading Range zone between $31,800 and $37,500, right at the Daily 200EMA support.
If we find a strong bull signal and confirmation candles following that support area, we should enter at least a 1:2 Risk/Reward Ratio long with a position size near our maximum, as justified by these data points and the macro bull trend. Stop loss should be placed below the Trading Range at $34,300. It's reasonable to take half profits at 1:1 Risk/Reward around $38,900, move the stop loss to your entry price to lock in profits, and then swing the rest of the position to at least $41,200.
đź’ˇ Trade Idea đź’ˇ
Long Entry: $36,600
🟥 Stop Loss: $34,300
âś… Take Profit #1: $38,900
âś… Take Profit #2: $41,200
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Measured Move completed followed by strong sell signal and confirmation bars
2. Two legs into a pullback with a gap to fill to the Daily 200EMA
3. Look for Support to long in the Trading Range near the Daily 200EMA
4. RSI at 38.00 and below the Moving Average, supports the continued to fall to the Trading Range
5. Once a strong signal and confirmation bull bars close above the Daily 200EMA, it's reasonable to long at 1:2 Risk/Reward
đź’° Trading Tip đź’°
It's reasonable to take half profits at the first resistance target in a long trade, or the first support target in a short trade. Using a 1:1 Risk/Reward Ratio for your first target, you can move your stop loss up to your entry price, locking in profits. This allows you to watch the rest of the trade execute without worry of losing money. This helps improve trading psychology and the equity in your account.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like đź‘Ť and Follow to learn more about:
1. Reading Price Action
2. Chart Analysis
3. Trade Management
4. Trading Psychology
How do we trade this? 🤔
My last analysis began just after the confirmation bar closed after the sell signal that wicked at $48,900. This analysis called for a short to just above the trading range support at $38,350:
That short has come and gone, there is not enough area left to short without placing too much initial risk on the trade. It is still reasonable to short on lower timeframes like the 5m and 15m chart, but not the 4HR and Daily as we're doing here. We should be looking for long entries in the Trading Range zone between $31,800 and $37,500, right at the Daily 200EMA support.
If we find a strong bull signal and confirmation candles following that support area, we should enter at least a 1:2 Risk/Reward Ratio long with a position size near our maximum, as justified by these data points and the macro bull trend. Stop loss should be placed below the Trading Range at $34,300. It's reasonable to take half profits at 1:1 Risk/Reward around $38,900, move the stop loss to your entry price to lock in profits, and then swing the rest of the position to at least $41,200.
đź’ˇ Trade Idea đź’ˇ
Long Entry: $36,600
🟥 Stop Loss: $34,300
âś… Take Profit #1: $38,900
âś… Take Profit #2: $41,200
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Measured Move completed followed by strong sell signal and confirmation bars
2. Two legs into a pullback with a gap to fill to the Daily 200EMA
3. Look for Support to long in the Trading Range near the Daily 200EMA
4. RSI at 38.00 and below the Moving Average, supports the continued to fall to the Trading Range
5. Once a strong signal and confirmation bull bars close above the Daily 200EMA, it's reasonable to long at 1:2 Risk/Reward
đź’° Trading Tip đź’°
It's reasonable to take half profits at the first resistance target in a long trade, or the first support target in a short trade. Using a 1:1 Risk/Reward Ratio for your first target, you can move your stop loss up to your entry price, locking in profits. This allows you to watch the rest of the trade execute without worry of losing money. This helps improve trading psychology and the equity in your account.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like đź‘Ť and Follow to learn more about:
1. Reading Price Action
2. Chart Analysis
3. Trade Management
4. Trading Psychology
Note
Bitcoin has bounced back up to the 30EMA and found some support. Given this outcome since the original update, I believe its possible we re-test $46,000-$48,000 before falling back down to the Trading Range Zone around $35,000. My premises on Bitcoins large pullback has not yet been invalidated and I do not plan to long on the Weekly chart until that major pullback happens.
My Bitcoin Lifetime analysis goes into detail:
-Joe Dean
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