Bitcoin: 2 Breaking Points.
Bitcoin higher low that was trying to develop a week ago was compromised and has instead established a minor lower high. This puts price into a conflicted situation: if the current 22K low is compromised, a push to 20K is within reason. IF 22K manages to hold, and produce a complex reversal pattern it would imply the short term bullish trend is still intact.
As a swing trader, you MUST always consider both sides of the argument while also considering economic variables that are NOT present on a single chart. In terms of Bitcoin longs, supports should NOT be compromised, ESPECIALLY in light of a bullish Nasdaq move. In this context, Bitcoin is acting relatively weak, which implies IF the stock market sells off in the coming weeks, Bitcoin is in a position to sell off more dramatically.
As far as bullish potential, the bond market (economic) implies that potential is LIMITED since rates are back to previous highs and are poised to go higher. Even IF Bitcoin gets its act together and attempts to rally to a 26K area high, in a rising rate environment, it is NOT likely to go much further over the short term. It is NOT a good idea to judge these charts in isolation like so many "experts" on here.
The short side of the argument is more attractive at this time. Short term momentum is still bearish, which implies a test of 20K or lower is more likely over the next week or two. In order to negate this idea, and prove that the broader bullish trend is still intact, the 23,600 AREA minor resistance will have to be cleared (see small blue rectangle on chart).
The long swing trade idea that I described in my previous report is likely to get stopped out for 2K points if it was taken in the mid 23Ks. The only thing going for it is that the short term structure is STILL bullish. That will also change IF 21K is cleared on the bear side (momentum and structure are two separate variables). In order for me to share a new long idea, I will require a complex reversal pattern OR a retrace on a smaller time frame AFTER the 23,600 area resistance is cleared.
Otherwise those who took this short from 24,150 (called privately two weeks ago) are looking at almost 2K points of profit, and NO risk since I suggested moving the stop to break even one week ago. The profit in these situations can only be determined by how aggressive or conservative you choose to be. Expecting big moves is usually not a good idea, especially when taking counter trend trades (which is what this was at the beginning). One suggestion is lock in half and let the other half ride. IF it breaks even, you at least lock in something while the opportunity presented itself.
This game is about managing RISK and EXPECTATIONS, NOT trying to forecast the future with a bunch of lines on a chart. Charts provide a point of reference that can be helpful for gauging potential and risk over a short period of time, NOTHING MORE. A strong grasp on the broader factors like interest rates play a key role in forming REALISTIC EXPECTATIONS. Along with this, you must embrace that markets are also IRRATIONAL and can move in ways that appear very dramatic contrary to broader factors.
Start with the information that carries the most weight first, then formulate from there. This game is MOSTLY random and if you do NOT know how to exploit temporary inefficiencies, you are much more likely to follow those who "claim" to be experts. Listen to PRICE not PEOPLE.
Thank you for considering my analysis and perspective. I hope you find it helpful.
As a swing trader, you MUST always consider both sides of the argument while also considering economic variables that are NOT present on a single chart. In terms of Bitcoin longs, supports should NOT be compromised, ESPECIALLY in light of a bullish Nasdaq move. In this context, Bitcoin is acting relatively weak, which implies IF the stock market sells off in the coming weeks, Bitcoin is in a position to sell off more dramatically.
As far as bullish potential, the bond market (economic) implies that potential is LIMITED since rates are back to previous highs and are poised to go higher. Even IF Bitcoin gets its act together and attempts to rally to a 26K area high, in a rising rate environment, it is NOT likely to go much further over the short term. It is NOT a good idea to judge these charts in isolation like so many "experts" on here.
The short side of the argument is more attractive at this time. Short term momentum is still bearish, which implies a test of 20K or lower is more likely over the next week or two. In order to negate this idea, and prove that the broader bullish trend is still intact, the 23,600 AREA minor resistance will have to be cleared (see small blue rectangle on chart).
The long swing trade idea that I described in my previous report is likely to get stopped out for 2K points if it was taken in the mid 23Ks. The only thing going for it is that the short term structure is STILL bullish. That will also change IF 21K is cleared on the bear side (momentum and structure are two separate variables). In order for me to share a new long idea, I will require a complex reversal pattern OR a retrace on a smaller time frame AFTER the 23,600 area resistance is cleared.
Otherwise those who took this short from 24,150 (called privately two weeks ago) are looking at almost 2K points of profit, and NO risk since I suggested moving the stop to break even one week ago. The profit in these situations can only be determined by how aggressive or conservative you choose to be. Expecting big moves is usually not a good idea, especially when taking counter trend trades (which is what this was at the beginning). One suggestion is lock in half and let the other half ride. IF it breaks even, you at least lock in something while the opportunity presented itself.
This game is about managing RISK and EXPECTATIONS, NOT trying to forecast the future with a bunch of lines on a chart. Charts provide a point of reference that can be helpful for gauging potential and risk over a short period of time, NOTHING MORE. A strong grasp on the broader factors like interest rates play a key role in forming REALISTIC EXPECTATIONS. Along with this, you must embrace that markets are also IRRATIONAL and can move in ways that appear very dramatic contrary to broader factors.
Start with the information that carries the most weight first, then formulate from there. This game is MOSTLY random and if you do NOT know how to exploit temporary inefficiencies, you are much more likely to follow those who "claim" to be experts. Listen to PRICE not PEOPLE.
Thank you for considering my analysis and perspective. I hope you find it helpful.
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