Short

Final Attempt at BTC Short.

Updated

If the premise of a trend reversal is going to come to pass we need to see rejection of the attempt to trade at a new high.

The breakout looks much more promising now but when you look at a lot of tops you find many of them have wicks slightly above the high. I believe these are referred to as "One tick traps" (I just call them stop hunts).

If the breakout can stick then in it's quite likely we make a retest of the broken short entry levels. Upon a break, I'll limit order for the retest to reverse. Usually get all the money lost short back by the time we're retesting the last high again.

There's some chance of a run away breakout but if that happens I'm just as happy to miss it and move on to the next trade.

I'm not a believer in "Once in a lifetime opportunities". There are huge opportunities in markets all the time. They're like buses.

I've had a lot of people posting on my BTC posts telling me I must reverse now or I'll "Miss out big".

I make a living trading. I've more fear of screwing up than missing out. There's always a better trade.

But we're at the optimal levels for a short now. If this is a false breakout it has to be evidenced by a sharp rejection back to under the support levels and a wick which is not breached.

So if the short entry works here, I can roll my stops to even when the rejection is in and freeroll for the reversal.

Note

It's so illogical how if you present a short thesis people always assume you'd prefer the market to go down. It's obviously be easier to make money if it doubled.

If BTC was going to zero and I was short, I'd not short to zero. I'd make a bunch money short and end up giving back at least 20% of it trying to buy where I thought was cheap. The idea of shorting things to zero isn't even inside the model of how I trade. I buy low prices and short high ones.

So in the best short scenario, I can't make 100%.

But if it goes long I can take 100% or more.

The easier way to make money is obvious. I just don't think the market exists to please me.

Note

Adding here with a tighter stop. Might have been the last liquidity hunt.

Note

Entries good but this is the bit where the bear move needs to prove itself.

A sharp drop to the 76 fib is something we can expect to see in a standard bullish retracement. If this holds, bear move is failing.

If this is broken again, likely see much more obvious bear conditions.

Stops to even on entries now. Wouldn't be good for the bear case if we got as high as the entry.

If it turns out the BTC rally has in fact been a bull trap this has to be evidenced by and extremely aggressive rejection of it. Likely a drop of around 50% before the first major bounce and complex bull trap.

These are things seen in bull trap failure. If they happen, they're a warning. If they don't then it lends a lot more weight to us being in the early development of a new trend leg.

Nothing should be subjective about the first rejection if it's a bull trap. Bull trap failures are big events on weekly charts.

Note

This is likely to be a big decision point. Either this is the low being made and we're going to rip or the failure of this to be a low is a break of the 1 hour uptrend.

Note

This is the bit to buy if you're bullish. The crashes into the 76 fib. Really good trade in a bull trend. Stops under the 86.

People say I never say anything bullish, so I thought I'd say it.

I'm not buying.

You know me.

Stops under 86 coz under there is rug risk.

Note

Stops on entries into a 76 crash could go to even now and freeroll the up move.

Rallies come off here in down moves too. If we break under the last low now it's our first big hint the local uptrend is failing and small chart trend will be down.

Note

The bounce so far would still be considered inside the pullback range. For it to remain so we need to see it rejecting in this area.

Blue arrows no bueno for bears. My stops would hit at even and there'd be no more shorting for me.

New low would now usually be really good for bears.

Note

This is the decision point of the trade for me I think. Red line is where my entry/stop is. I think if we hold this retest that's the end of the beat attempt and if we make a new low things will start to get much easier.

Note

Hourly candle big classic bullish candle. These off the 76 can be really good (And this is why buying 76 crashes are good in an uptrend).

But when you get really nice bullish candles like this and they end up not being lows, usually a huge red flag.

Many things stack up to say BTC low should be in there or the next break is much more important.

Note

I hit breakeven stops in this and didn't short again. I took a bunch of puts on related stocks.

If I am right on the reversal, the stop hunting is brutal that there are more efficient ways to make the bet.

So just for the purposes of tracking, BTC is now against at the critical make or break 76 level.

Low here or big break is likely made.

Note

Okay so supports popped. We can now invert the continuation strat.

If sellers are going to hold a strong downtrend they should come in somewhere in this general zone.

Note

Sellers come in on the 76. Which is a classic sign of continuation.

Read about the 76 reversals here.

Note

Now we can fib the rally and define the next pending bull failure zone.

Supports met. We either break here and bias is a new low or this is where the bulls should defend in an uptrend.

For various reasons, this is currently more like a downtrend than an uptrend. Bias is towards 76 failure here.

Note

Sticking with our theme of 76s tending to hold in the direction of the trend, the recent bounce holds the 76 before selling again.

Usually denoting us still being in a bear trend. 66,700 next big decision level.

Note

We're getting into the pending support area now. PA we have is much more consistent with a downtrend but if this is going to turn it usually finds support soon.

Breaking of the 76/86 usually leads to further breaks.

Potential for a lot of bearish momentum on breaks of supports.

Adding to my short positions in ETH.

Not shorting BTC because if it turns out the bear move is right the stop hunting has been relentless. Would prefer to trade ETH, which has only been brutal.

Bear case looks good but bears mustn't be complacent. Keep planning support levels. Trail stops when close to them. Wait to see if bigger breaks are made.

Note

With the amount BTC has moved up recently it'd be entirely fair game to see it over 20% lower than it is now even inside of a correction in a bull trend. I think 30 - 35% or so could happen just in a correction.

But if the spike out of the high was really just a huge weekly chart false breakout, this would be very early in a far worse down move setting up.

False breakouts like that are usually followed by rug pull events. Always worth being careful when attempts at highs wick.

Note

Looks like support failure.

Usually expect to see this hold on the first bounce here.

Note

Down after support break. Approaching next support/break level.

Note

The bear 76s continue to hold, pending weight to the downtrend thesis.

Really big decision level to come if we break lows again. 62 - 62.5 BTC has its first major trend decision. If that level breaks, the 1 hour uptrend can break.

If the 1 hour uptrend breaks, you might see a lot of the rally vanish quickly.

Trade active

Added some more to my ETH short and bought some more puts on MSTR.

Note

Now we're into the action part of this.

We've now filled where the big bull continuation level would be or where a much more important bear break is about to be made.

Drop to here was always fair game even inside of a strong bull trend (Was one of the reasons I thought it made sense to fade the BO) but what happens here is the real decision.

If sellers break lows again and push through the next support levels, much more important break.

Biggest chance of a low being made here. Bears should trail stops to even to make their trade a freeroll. Huge break potential if supports fail.

Note

Moment of truth now. Big support met.

If this folds, that's the first really big failure of the uptrend.

Note

Crunch time me thinks.

Big bounce on the 76. Which can be really good for a bull signal but also happens in bear moves. When it happens in bear moves the move usually stops by the 61-50 fibs which are testing now.

Bears should be quick to bank profits on shorts if resistances fail.

It possible even inside of a bear pattern we get some sort of double wick. Never under estimate stop hunts ability to be horrible.

Major bear break if this isn't the low.

Note

61 rejected and 76 broken.

Not good signs for bulls.

Note

Things remain in favour of the bears with us trading down to the 86 fib.

As a general rule, lows will usually be made before the 86 fib and when the 86 fib is hit usually retracements end around the 76 retest.

So looking for bear cont in this zone to hold the downtrend pattern.

Very very close to a big bear break now.

Progressively trailing stops to lock in profits. I am always more wary trading at supports than shorting rallies.

But the bear setup remains good at the time of writing.

Note

Whether or not this level holds seems to be incredibly important when viewed in the full context.

Here's a more macro post.

BTC is One Break Away From an Extremely Bearish Chart.

Note

Our best thing to do at this point is to fib the high to low of the last leg down.

When we do that we can see we're getting into the decision area now.

In a bear trend we see a rejection around the 76 level and a new low.

There's an ever increasing case for a waterfall style move if that new low is made.

Note

76 filled.

I really have to stress the polarity of the situation here. A break could be extremely good for bears but do not be complacent.

If the bear trend fails something very different can happen very fast.

Trade active

Adding shorts.
Short BTC 64,800
Stop 65,200

Note

Stops hit.

Usually 76 breaks go to at least the 1.27 and at least the next 76.

Both of these conditions are met now.

Note

Trying another short here at the next resis.

Same rules. If we're in a downtrend I expect to see a sharp rejection close to 76 and if we break these levels bias is towards strong up movement.

Still really good chance for bearish continuation here.

Sharp drops almost inevitably have sharp rallies before them.

Nothing big is ever easy.

Note

Oh! We have a harmonic.

That's good. harmonics almost always give us trend decisions for the foreseeable future.

Harmonic compliments levels of the 76 reversal / failure.

Very likely a major trend decision is made somewhere in this area.

I reiterate, the floor may well open up if we break the lows again. It really should be expected bad things could happen under there.

Note

Here's everything together on the one chart. Textbook sell signal in this area. If strong sell signals fail, they usually do so in style and a spike to the high is viable. Remains a risk even in a net bear setup, because stop hunting is fun.

Really bearish outlook if we turn in the reversal zone here.

Note

In a true rug pull the first drop is to about 50% off the high. If and when that happens, I'll probably be looking for long positions.

But if that happens, I'll 100% be shorting the rip at some point. Because I think that would be a bearish break, not a bullish retracement.

Note

I think this is setting up to yank hard and that big monthly bear candle is going to be a real thing.

Starting to strongly suspect that now.

I can say with a high degree of confidence if there was a rug pull it would be obvious after the fact using a few simple metrics that warn of rugs. They're all very obvious now.

I'm always scared what looks obvious is booby-trapped - but it's apparently far from obvious to many people.

So maybe a real rug is coming.

What I think doesn't matter. It changes all the time and is wrong as often as it's right. I never trade based on what I think. I trade based on strategies that tell me what to do.

But starting to think the rug looks really legit.

Note

There are a lot of people who are relatively new to the market who've never went through an experience which told them everything they think is liable to be completely wrong in every way. Everything you think you know can work against you. The more you think you know it for sure, the worse it is.

You do not know anything. You've a lot of thoughts. Some yours. Many from the theories of others.

None of us know anything about what will happen in the future. We only have our ways of working out the odds.

If things go bad some people are going to learn this lesson in a very tough way, over a prolonged period of time.

Note

It takes on average 5 yrs or more for people to achieve sustainable success in markets and it's because markets can easily make you delusional as to why they are moving.

You might have an idea why price should go up. Maybe you put a lot of work into it. Have conviction. Market goes up. And this makes you think what you think is important.

Maybe ...

Maybe not.

Maybe the market went up based on something you have no awareness of at all and that has come to an end.

If you get into the market during a time good for whatever you're doing, it takes a while before you get some self awareness on the limitations of your knowledge.

And there's no one who thinks they know more than the BTC bulls.

Some people will be hurt really badly if they're wrong.

I'm not gloating. I don't like to see it. I don't "Hope" it happens. Just stating observations.

Note

We trade essentially flat since the last update. Not much to add but I think we might be getting close to the definitive break one way or the other here.

Note

Added COIN puts to my short BTC bet.

Note

Pushing away from the 76.

Not a good sign for bulls. Bulls need that level to break. Rejection = bad.

Note

Almost everything we've covered so far has just been using the 76 fib in different ways for trend decisions.

Hopefully a good illustration of the value that can be found in this level and derivative strategies around it.

Note

Getting into supports now. This is a spot to trail stops and ensure if a new high is made you don't make any losses on current entries.

Possible low here, but bias strongly towards bear. Because all the bearish stuff mentioned above.

Note

Fairly standard stuff since last update.

Bounce on the 76. Very typical. Waiting to see if it's reaction for now (Meaning more down) but a break of the last high would trigger a full exit for me.

Short looks fine for now. Regularly bounce here in a down move.

Note

Up to the 76 retracement of the drop. Decision level.

Note

Bull break fails so far.

Things have not changes. The situation remains if the lows are broken things are likely to get ugly.

Trade active

Trailing stops hit on failed attempt at new low. Back in shorts now on the 76.

Note

Selling should start soon if this is working.

Not good for bears if we break these resistance levels but if they're going to hold we should see selling soon.

Note

Something is likely coming.

When we get these double sided wicks it usually tells us something is coming. The market has kicked out and trapped people on both sides and is ready to move.

Can go either way, but most often a prelude to action. Currently looks bearish but we need to see how candles close.

Note

Gish that was slow but the rejection off the resistance has come.

Stops trailed on entries from resis.

Note

Stops trailed tight on all related shorts.

Possible we make a secondary spike high.

Might not happen. Good for bears if current supports break - but this would be ideal.

Always better to be a bear when people are making jokes.

Harmonic Spike is a Risk for Bears Here.

Note

Hopefully if you've been following the thread it's quite easy by now to understand what we do next.

Fib the rally, look for decisions 76-86.

Be aware of the spike out risk or bull cont risk at these levels.

Encouraging for bears if they break.

I've mentioned various times in this thread, under that low - bad things can happen.

A lot of time has passed since I said all that but nothing has changed.

Note

So much potential for this to go nasty under the previous low. I hate to hype things up but it really isn't to be understated how strong bears could be under that low.

If the low isn't made here, then we have the early shape of a pending bullish harmonic.

In the instance this is bullish, it implies capitulation to the 1.61. Always capitulation in the D leg of a bull harmonic.

Conversely, if the harmonic setup forms and fails, waterfall events are most likely.

Very important what happens in this area.

I'm almost certain whichever way it goes we're going to see price speed up. That'd be valid in the bullish breakout, the false bull breakout, the bullish harmonic and the bear break.

Very likely faster swings are coming. Probably some boring ranges but when the real moves start, they'll be quick.

Note

More on the waterfall setup

BTC has potential to waterfall under 60K.

Note

TLDR of the thread so far is 76 levels are very useful.

And as an additional point, they're all the more interesting when we make M shapes into support and W shapes into resistance.

Read a bit more on the possible sell signal to form by clicking link below.

Note

Harmonic spike looks like it'll be a miss.

SPX filling its short level now gives more of a bias toward BTC failing to make the spike if a bear move is coming.

Note

Floor can open up on this if the low breaks. Good chance this would be accompanied by some sort of exdogamous news event.

Note

Update on the big set of fibs from the high.

We currently have a primary high on the 76 and a secondary high on the 61.

61 rejection can turn things sketchy real quick.

Trade active

Limit orders filled for short.

Note

Adding to shorts here. Should see the rally reject soon if the bear setup is working. If not, doubt I'd be interested in trying another short before 78K.

Note

Okay that should be the high in if I have this right. I've now got pending long orders above the resistance level.

Have a strong short bias currently but because if we do make a make a spike out I'll want to short again somewhere near 78K, I'd want to make money on the way up to offset my risk.

Y'know, otherwise I'll die poor.

Note

Eek. Now testing that all important 60K level.

As mentioned above, various times, waterfall action under there is a big risk.

Note

Looking really sketchy for a legit bear setup now.

If bulls can't pull off a big hold of the lows here, very hard to see how this is anything other than a capitulation leg.

Explained the technical risks in detail above. Now we have pending confirmation of that along with a driving narrative to support a big move.

Really nasty spot. Things could get really bad if this breakout is made.

Note

Here's a post covering the broader implications of a bear break here.

Crypto Uptrend Failure May be Imminent: Here's Bear Break Plans.

Note

Adding ETH shorts into the 76 bounce.

Note

BTC back to resis.

Crunch time now.

Note

Stops to even on recent short entries.

Have no risk on now.

If we make the next break the worst is yet to come.

Mark my words ... if there's a false breakout there will be a rug pull.

That's what false BOs do. They make everyone think they know what's happening and then they rug them.

Note

Stops trailed now. This may be a break setting up but if not I'd want to short into the next spike. So protecting profits to allow me to try short at better levels if offered.

Strong chance this just breaks. Remaining short unless we see a clear failure of the local downtrend.

Note

Bounce a bit shallow, so far, than I expected. Trying a second attempt at the short now. Trailing stops hit when the downtrend broke.

Note

I'm not going to make comments on the news yesterday. I'm a TA trader and we already have enough overnight war experts.

As you can see if you've followed this thread, I've just continued execution on the plans laid out before hand and I plan to do so.

What I will say, though, is yesterday I think was a strong indicator people in BTC do not really think it's a "Safe Haven" style asset.

When a narrative that should have sent BTC flying if it was came along - it just slammed.

More on that here:

Iranian Drones Shoot Down the "Safe Haven" Narrative.

And then back to the TA.

Note

Spike out zone filled

Note

Protect profits now. Worth staying short while we make lower lows and lower highs but there are a couple retracement patterns valid inside a downtrend.

Either one would offer a better short later.

May or may not happen but we're into a risky area for bears. Protect profits and then if we bounce you get to bet on the next leg with house money.

Note

Starting to feel more like this might just slam.

I always find it harder to be bearish on things when they've been down a while. I prefer to short rallies but I recently tried to fade the USD rally and SPX drop. Both of these seemed like a good idea for about 20 minutes and then I ended up bailing on everything around even.

Looks like those trends may keep going and if they do they're heading through big levels without much retracement.

Implies strong trend. The correlation in BTC would imply that 60K break may well be coming.

And all that can come with it.

Note

Break of 60K opens the door to 40K. Would be surprised to not see 40K hit if 60K fails.

Could be a fast move.

Note

Bull failing to hold the previous low.

Unless this becomes a false breakout really soon this looks like the break.

Note

Back to 60

Note

Local 76 fill.

Note

The infamous halving has occurred. Having no effect at all on price.

Note

People asked me a lot about what I think of the halving and I really think it's unproven as an indicator.

There've been 3 times it happened. 2/3 times it went sideways for a while and up. 1/3 times it crashed 30% and then went up.

I don't get the FOMO. 100% of cases you could have easily bought after the halving and has the exact same gains or better.

IDK if people are doing the backtesting. It's only 3 events. Isn't hard. 2/3 on 3 events isn't significant.

If it dropped off this one, that'd be 2/4 - A coinflip.

So basically, I don't care. I'll execute on the plan as stated. It covers both up and down moves and does not consider the halving.

Here's some more thoughts on why this may be overrated as an indicator.

Now the halving has happened, does that mean SPX has to rally?

Note

Bit of a rally recently but I think the new low may have been significant.

Little false breakouts like this do happen (And I'm usually wrong when they happen) but most often in a strong bull move I'd not have expected to see this and I think it lends itself to continuation.

We currently have a confluence of multiple indices hitting their respective resistance levels also.

So I think this is a fairly important spot. If the bear move is going to work it'll probably be due to start soon and if 60K is broken again there'll be a lot more momentum this time.

40K remains the bear break target.

Note

Spike risk for bears here.

Would be ideal to short a spike out of the current high. Careful here. More of a long bias than a short one at this level.

Note

Feeling more sceptical about the bounce with the lack of momentum so far and especially with indices looking like they may be weak in the coming sessions.

Have some longs on from close to the low as protection but have stops on them just under even now. If the early attempt to rally we're seeing here fails I'd not want to be long into a new low.

61 reversals are far rarer. I'm wary of the risk of a spike. But if supports keep breaking, bear momentum can pick up.

Note

Took the scenic route but we have an instant 5% drop on the 60K break this time.

Note

Butterfly pattern. Soon get to see if this is a correction in a down move or a legit low.

Note

Bears still have control.

Note

If we're gonna dump hard it should be coming soon. Sized up on BTC shorts and related puts.

Read below idea for more:

Note

Curious split of results of the four trade targets. BTC and MSTR having much bigger rallies. MSTR I'm still down on from entry.

COIN and ETH both doing well. I suspect we have some sort of lead / lag situation here where one will catch up with the other.

Moves in indices are starting to skew me much more towards net bullish. Not been short anything last days.

Think I'm going to stick with the short attempt on crypto for now but do also have much stricter exit plans now.

I do find it suspicious how easy it is being short ETH relative to BTC. As I've mentioned a few times in this thread I find it more efficient to express bets with ETH and puts than BTC bets directly because the stop hunting. This general thesis is working - with the exception of MSTR.

I'll take last attempts at BTC shorts into the bigger 76 retracements.

If the trend will hold these should be spike outs. Am quick to stop out on breaks of resis now. When markets are down there's always the paradox of them potentially being weaker because they're selling but conversely if the correction is in they'll be extremely strong.

Note

Hard not to notice how much people love to celebrate failure here. Isn't a good look imo.

When I am making posts and getting things right, hardly any notis. Soon as I get things wrong the notis explode.

Isn't a good way to be, my friends. I find it's also often a mark of insecurity in markets.

I'm here to talk about real trading strategies. Things I've used for years to make a living. Properly disclosing the risks, how to deal with them and the win/loss distribution of them. I'm dealing with reality. If you're not, then tbh, I don't care what you think of my strategies.

holeyprofit

Also on:

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.