Bitcoin Stop Loss Hunt... Or Bearish Downturn?
Updated
Good afternoon traders!
Bitcoin had a strong 6% pull back from it's rising wedge that we have been talking about for the past week and many analysts have pointed out.
In my previous analysis on, I had stated we were watching the .618 level and would be shorting the top of the pitchfork if we didn't break above it.
The bulls could not manage to maintain momentum and break above the golden resistance zone and we saw divergence on both the RSI and the STOCH on the smaller time frames.
This does not mean the bulls are defeated yet as there is still a rising channel that has not been broken yet.
On a smaller time frame, we are now forming a bear flag on the hourly after a dead cat bounce to the .236 from the swing high and swing low.
You can watch for a potential retest of the $7100 zone with a confluence at the top of the bear flag with a confluence of the .382.
I will re-enter a long position into the .618 zone (noted in red) of my previous pitch fork analysis as this has been a great long opportunity for the past several weeks.
In our VIP group, we recommended short with a stop loss at $7600 as many indicators showed we were ready for a pull back.
This is exactly what hedge funds to do manage risk and to take advantage of overextended rallies.
Hedging is just a way to deleverage risk if you are in a unilateral position.
There are several methodologies to hedging:
When you are in a long position and in an overextended rally, you can hedge your position with:
> Short on a different exchange (longing on bitmex, short on bitfinex)
> Short with a second account.
(some whales do this and it's known as wash trading.)
> Short on the futures market.
> Using a trailing take profit SL.
> Take a profit on a specific percentage and move to fiat for a potential move down to add to your entry.
The rising/bullish channel support is sitting at $6930, but I believe we will see a break of the channel and retest the .618 of the pitch fork.
This will also act as a bear trap as many short traders will pile on with the break of the support line.
LONG ENTRY:
$6800-$6900 with an ideal entry at $6820 to $6880 in the .618 zone.
TARGET: $7400 for the double top.
STOP LOSS: $6750
In my opinion, we are setting up a strong bear trap and I think we will see shorts continue stacking like we saw before back to all time highs. This will give us a very nice potential for a strong Short Squeeze to form a double top and a push back to $7400.
I will be closing out of my hedged short at $6900 and will add to a long position at the entries above.
CAUTION:
If we do break the .618 and the pitch for, we may fall back to the $5800-$6000 low.
So be prepared to short with a break and long from the lower entry.
Hopefully you enjoyed my read and I look forward to all your comments and may Satoshi bless all your bags. ;)
Bitcoin had a strong 6% pull back from it's rising wedge that we have been talking about for the past week and many analysts have pointed out.
In my previous analysis on, I had stated we were watching the .618 level and would be shorting the top of the pitchfork if we didn't break above it.
The bulls could not manage to maintain momentum and break above the golden resistance zone and we saw divergence on both the RSI and the STOCH on the smaller time frames.
This does not mean the bulls are defeated yet as there is still a rising channel that has not been broken yet.
On a smaller time frame, we are now forming a bear flag on the hourly after a dead cat bounce to the .236 from the swing high and swing low.
You can watch for a potential retest of the $7100 zone with a confluence at the top of the bear flag with a confluence of the .382.
I will re-enter a long position into the .618 zone (noted in red) of my previous pitch fork analysis as this has been a great long opportunity for the past several weeks.
In our VIP group, we recommended short with a stop loss at $7600 as many indicators showed we were ready for a pull back.
This is exactly what hedge funds to do manage risk and to take advantage of overextended rallies.
Hedging is just a way to deleverage risk if you are in a unilateral position.
There are several methodologies to hedging:
When you are in a long position and in an overextended rally, you can hedge your position with:
> Short on a different exchange (longing on bitmex, short on bitfinex)
> Short with a second account.
(some whales do this and it's known as wash trading.)
> Short on the futures market.
> Using a trailing take profit SL.
> Take a profit on a specific percentage and move to fiat for a potential move down to add to your entry.
The rising/bullish channel support is sitting at $6930, but I believe we will see a break of the channel and retest the .618 of the pitch fork.
This will also act as a bear trap as many short traders will pile on with the break of the support line.
LONG ENTRY:
$6800-$6900 with an ideal entry at $6820 to $6880 in the .618 zone.
TARGET: $7400 for the double top.
STOP LOSS: $6750
In my opinion, we are setting up a strong bear trap and I think we will see shorts continue stacking like we saw before back to all time highs. This will give us a very nice potential for a strong Short Squeeze to form a double top and a push back to $7400.
I will be closing out of my hedged short at $6900 and will add to a long position at the entries above.
CAUTION:
If we do break the .618 and the pitch for, we may fall back to the $5800-$6000 low.
So be prepared to short with a break and long from the lower entry.
Hopefully you enjoyed my read and I look forward to all your comments and may Satoshi bless all your bags. ;)
Note
No go on the $6800 hold at the .382 as we blew through all supports including the .618 without as much of a hello. .786 seems to be offering some hopeful support.Shorts are stacking insanely high.
Easy to squeeze them out with a little nudge.
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