Bitcoin Bulls: Consider 22K.
Before you go all in on the "Bitcoin is going to 50K" typical retail herd mentality hype, consider an objective (and more professional) perspective of this recent Bitcoin rally. Before you put money at risk in this game, it is very important to consider the source of the information you consume.
Here are some important technical considerations for the coming weeks:
1. 18,300 range resistance has been cleared. This is certainly a positive, but the bear argument is still not completely out of the way. As an objective investor/trader you must ALWAYS consider both sides. For those who follow my signals, I mentioned I was looking for the short setup at the 18,300 area, and it NEVER presented itself. Waiting for a predetermined setup helped me to avoid another would be stop out. The nonprofessional values profits, while the professional values minimizing losses. DEFENSE wins this game. This is something that you can only gain value from when you have achieved emotional control.
2. 22K AREA is the key trend resistance for the SWING TRADE time frame. As long as 22K is NOT compromised, it is still within reason to expect more from swing trade shorts. At this point, I am still open to the idea of sharing swing trade signals on the short side IF a setup presents itself somewhere in this price range.
3. Is the trend changing? It is possible, but there is NO WAY to make that judgement with any degree of certainty. There are a LOT of people who make these claims who are NOT qualified to do so. They manage to fool people because the market will randomly make them right. If you are emotional, they are likely to fool you. What will add to the bullish argument from here is this: IF Bitcoin retraces back into the 18,300 AREA (old resistance) NEW support and produces a bullish reversal. I will be open to a swing trade long IF this scenario presents itself.
4. Swing trades are NOT the same as day trades. When markets move dramatically in a short time, it can be very hard to WAIT for swing trade setups, especially if a trend is transitioning. The solution to this is to mitigate risk by capitalizing on the momentum on smaller time frames only. Day trades allow for this BUT you must have adequate experience, other wise you will only lose money.
5. The BONDS are KEY to this market. If you don't understand how interest rates affect markets, you should take the time to learn. At the moment, bond prices (10 YR Note) have tested a key resistance but not broken through. IF this resistance stays intact, and rates continue to rise, that will likely weigh on the markets in a bearish way. That would translate into "bitcoin (or the stock market) is not likely to continue rallying". And that emphasizes that risk on the long side can still be very high. THIS can change, and may be in the process of changing, but the PROOF is simply not there YET.
Unless you are an "insider", it is NOT possible to forecast ANY market over the long term. Technical analysis helps to provide a short term window (a few weeks) and provides a way to quantify risk. It will not account for information that has not been processed by the market (like surprises). Markets price what is known now into the future and if something unexpected comes into play, price will ADJUST in a positive or negative way. This is what makes markets EFFICIENT and MOSTLY random. I tell you this so that you can judge the information that you regularly consume in a more OBJECTIVE and less emotional way.
Thank you for considering my analysis and perspective. I hope you find it helpful.
Here are some important technical considerations for the coming weeks:
1. 18,300 range resistance has been cleared. This is certainly a positive, but the bear argument is still not completely out of the way. As an objective investor/trader you must ALWAYS consider both sides. For those who follow my signals, I mentioned I was looking for the short setup at the 18,300 area, and it NEVER presented itself. Waiting for a predetermined setup helped me to avoid another would be stop out. The nonprofessional values profits, while the professional values minimizing losses. DEFENSE wins this game. This is something that you can only gain value from when you have achieved emotional control.
2. 22K AREA is the key trend resistance for the SWING TRADE time frame. As long as 22K is NOT compromised, it is still within reason to expect more from swing trade shorts. At this point, I am still open to the idea of sharing swing trade signals on the short side IF a setup presents itself somewhere in this price range.
3. Is the trend changing? It is possible, but there is NO WAY to make that judgement with any degree of certainty. There are a LOT of people who make these claims who are NOT qualified to do so. They manage to fool people because the market will randomly make them right. If you are emotional, they are likely to fool you. What will add to the bullish argument from here is this: IF Bitcoin retraces back into the 18,300 AREA (old resistance) NEW support and produces a bullish reversal. I will be open to a swing trade long IF this scenario presents itself.
4. Swing trades are NOT the same as day trades. When markets move dramatically in a short time, it can be very hard to WAIT for swing trade setups, especially if a trend is transitioning. The solution to this is to mitigate risk by capitalizing on the momentum on smaller time frames only. Day trades allow for this BUT you must have adequate experience, other wise you will only lose money.
5. The BONDS are KEY to this market. If you don't understand how interest rates affect markets, you should take the time to learn. At the moment, bond prices (10 YR Note) have tested a key resistance but not broken through. IF this resistance stays intact, and rates continue to rise, that will likely weigh on the markets in a bearish way. That would translate into "bitcoin (or the stock market) is not likely to continue rallying". And that emphasizes that risk on the long side can still be very high. THIS can change, and may be in the process of changing, but the PROOF is simply not there YET.
Unless you are an "insider", it is NOT possible to forecast ANY market over the long term. Technical analysis helps to provide a short term window (a few weeks) and provides a way to quantify risk. It will not account for information that has not been processed by the market (like surprises). Markets price what is known now into the future and if something unexpected comes into play, price will ADJUST in a positive or negative way. This is what makes markets EFFICIENT and MOSTLY random. I tell you this so that you can judge the information that you regularly consume in a more OBJECTIVE and less emotional way.
Thank you for considering my analysis and perspective. I hope you find it helpful.
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