Hogs lining up to slaughter?
"Bulls make money, bears make money, pigs get slaughtered"
Today I present a counter argument to all the bullish news and technical analysis that has been floating around the past week since Bitcoin's price rose over $1000 in a day.
The greed is becoming strong again; the fear and greed index for Crypto currently sits at 65% to greed, and longs make up 60% of the market. These are metrics that one cannot use alone when trading but coupled with technical analysis it can give a good idea of what is to come. Bulls and bears, although their contrasting trading styles can make money in this range, on the other hand pigs focus so much on making large monetary gains in the smallest amount of time, thus taking on higher degrees of risk in order to make a profit quickly and inevitably get slaughtered.
I show the Weekly Bitcoin chart above, very clear and easy to read agreed...? Over the past year Bitcoin has seen several rallies from the $6,000 support level and each one got weaker and weaker, until in turn created a descending triangle which we broke down from. What was interesting though is that each rally reached the .618 Fibonacci retracement before coming back down. Today as of writing this we are seeing the same rally point to the golden pocket once again. Along with the .618 golden pocket price was also rejected by the 55EMA to the exact dollar.
I am not trying here to spread fear, by rather showing you a counter argument to all the bullishness. Old investors that lost money in 2018 are starting to come back, bears are turning bullish and since Bitcoin broke $5000 I am hearing a lot of stories saying we are out of the bear market on our way to new all times highs already. What seems too good to be true in trading normally is. I have been trading many years and seen this type of scenario and it does not end well for the greedy traders.
I must point out for transparency that I am in a long position as of writing this, but I have take profits and stop losses set. It would not be characteristic of Bitcoin to move up freely without a shakeout. This post has not been a doom and gloom bearish post, but rather I hoped to open your eyes to two key technical analysis elements: the 55 weekly EMA, but more importantly the golden pocket Fibonacci resistance. One can place their Fib starting level slightly above where I have(mine is taken from the last weekly candle prior to the break down), if taken from higher pivots obviously the golden pocket is located higher up. With the way Bitcoin has been unable to break the golden pocket of resistance in its retracements if price can finally get above it will be a great sign, but until that happens we still have strong resistance overhead. Another Wave upwards would would finally get a lot of traders sat on the sidelines buying into this market, which in my opinion would then make for a lovely bull trap.
I would like to conclude with that although I have an opinion of the market I trade the charts in their truest form. I will not fight momentum and trade Bitcoin upwards should we get the break (I am in a long now too remember), but I will be quick to take profits from this long and open shorts (at least for a hedge) should the charts begin to show signs of weakness, which for me now is from trading the parallel channel that has formed over the last 5 days of trading. This parallel channel, which has been respected perfectly to the exact tick many times already has been covered in detail over on my Youtube videos.
Thank you,
Daniel
PS.
I love scalp trading Crypto in these market conditions whatever the direction.
Volatility >
Today I present a counter argument to all the bullish news and technical analysis that has been floating around the past week since Bitcoin's price rose over $1000 in a day.
The greed is becoming strong again; the fear and greed index for Crypto currently sits at 65% to greed, and longs make up 60% of the market. These are metrics that one cannot use alone when trading but coupled with technical analysis it can give a good idea of what is to come. Bulls and bears, although their contrasting trading styles can make money in this range, on the other hand pigs focus so much on making large monetary gains in the smallest amount of time, thus taking on higher degrees of risk in order to make a profit quickly and inevitably get slaughtered.
I show the Weekly Bitcoin chart above, very clear and easy to read agreed...? Over the past year Bitcoin has seen several rallies from the $6,000 support level and each one got weaker and weaker, until in turn created a descending triangle which we broke down from. What was interesting though is that each rally reached the .618 Fibonacci retracement before coming back down. Today as of writing this we are seeing the same rally point to the golden pocket once again. Along with the .618 golden pocket price was also rejected by the 55EMA to the exact dollar.
I am not trying here to spread fear, by rather showing you a counter argument to all the bullishness. Old investors that lost money in 2018 are starting to come back, bears are turning bullish and since Bitcoin broke $5000 I am hearing a lot of stories saying we are out of the bear market on our way to new all times highs already. What seems too good to be true in trading normally is. I have been trading many years and seen this type of scenario and it does not end well for the greedy traders.
I must point out for transparency that I am in a long position as of writing this, but I have take profits and stop losses set. It would not be characteristic of Bitcoin to move up freely without a shakeout. This post has not been a doom and gloom bearish post, but rather I hoped to open your eyes to two key technical analysis elements: the 55 weekly EMA, but more importantly the golden pocket Fibonacci resistance. One can place their Fib starting level slightly above where I have(mine is taken from the last weekly candle prior to the break down), if taken from higher pivots obviously the golden pocket is located higher up. With the way Bitcoin has been unable to break the golden pocket of resistance in its retracements if price can finally get above it will be a great sign, but until that happens we still have strong resistance overhead. Another Wave upwards would would finally get a lot of traders sat on the sidelines buying into this market, which in my opinion would then make for a lovely bull trap.
I would like to conclude with that although I have an opinion of the market I trade the charts in their truest form. I will not fight momentum and trade Bitcoin upwards should we get the break (I am in a long now too remember), but I will be quick to take profits from this long and open shorts (at least for a hedge) should the charts begin to show signs of weakness, which for me now is from trading the parallel channel that has formed over the last 5 days of trading. This parallel channel, which has been respected perfectly to the exact tick many times already has been covered in detail over on my Youtube videos.
Thank you,
Daniel
PS.
I love scalp trading Crypto in these market conditions whatever the direction.
Volatility >
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.