Bitcoin: 73K Break Or Fake?
Bitcoin continues to flirt with the 70K resistance zone (blue rectangle on chart) and has followed the first leg of my previous chart illustration. With the halving coming very soon, there continues to be over exaggerated claims of Bitcoin "going to 100K by next month" nonsense. Again stop listening to people, LISTEN TO PRICE. Let me explain some scenarios to watch for this week.
First, realize that my analysis and perspective is for the short term trader. NOT the investor. My time horizon for my articles is typically 1 to 2 WEEKS out. If you are an investor wondering if you should invest, this analysis will not be helpful. As a quick note, when prices are flirting with all time highs, and looks its best, it is usually NOT a good time to be investing, especially with leveraged products.
As for scenarios for this week: you will notice an arrow pointing to the previous all time high and a blue rectangle between 73,500 and 76,500 AREAs. This is the high probability bearish reversal zone of fake out zone. If Bitcoin is going to fake out, this area is where it is most likely to begin. Watch for bearish pin bars, bearish engulfing candles, etc on the larger time frames. Keep in mind if price is pushing into the 76K area, it is going to get a LOT of attention by the hype machine. Meanwhile these are highly vulnerable prices for longs.
IF price retraces from this area, it can still considered a B wave, and can find support in the 64K to 60K support areas. I would NOT be overly bearish in this scenario, it is more likely to consolidate recent gains rather than become a "bear market". Markets are NOT binary nor are they simple. Many forces are in play simultaneously and it would take a major catalyst to surprise the market in order to initiate a "bear market" or a broader correction.
As of now, there is a new swing trade long signal in effect from the 70,500 area. Since it is appearing inside a resistance zone, it is less than ideal and carries greater risk. This could be the beginning of the push the 73K test and fake out scenario I just described.
In situations like this, (trend continuation signals at unattractive prices) it is best to work on smaller time frames in order to compensate for the greater risk. Day and swing trades that carry LOW expectations. Like a push into the 71.5 or 72K area is within reason for these type of strategies. Expecting 80K, etc. is much less reasonable in terms of probability.
Another important thing to note: similar to the reversal zone from 73,5 to 76.5, there is a larger magnitude zone (not on this chart) that spans as high as 83K. Which means over the next few MONTHS, Bitcoin can probe this area before a broader correction ensues. IF we see this, the mega internet hype can be relentless and strongly placate to your GREED. Make sure to understand, markets move in CYCLES not straight lines. IF a correction begins from this larger magnitude fake out zone, it will likely be steeper and longer than most expect. I am not being bearish or pessimistic, I am simply pointing out the potential risk.
I understand how many can get frustrated with my warnings and claim that it costs "money" by missing out on greater valuations. This feeling is rooted in greed and all I can say is the market is a much more expensive educator than I am. Missing out has to do with how willing you are to take risk, and I learned the hard way that the key to this game is taking SMALL risks and is the position that I write from. There is no way to know where the market will be in the future, all we can do is MEASURE the potential and the RISK. From there only only you can decide how to go about participating.
Thank you for considering my analysis and perspective.
First, realize that my analysis and perspective is for the short term trader. NOT the investor. My time horizon for my articles is typically 1 to 2 WEEKS out. If you are an investor wondering if you should invest, this analysis will not be helpful. As a quick note, when prices are flirting with all time highs, and looks its best, it is usually NOT a good time to be investing, especially with leveraged products.
As for scenarios for this week: you will notice an arrow pointing to the previous all time high and a blue rectangle between 73,500 and 76,500 AREAs. This is the high probability bearish reversal zone of fake out zone. If Bitcoin is going to fake out, this area is where it is most likely to begin. Watch for bearish pin bars, bearish engulfing candles, etc on the larger time frames. Keep in mind if price is pushing into the 76K area, it is going to get a LOT of attention by the hype machine. Meanwhile these are highly vulnerable prices for longs.
IF price retraces from this area, it can still considered a B wave, and can find support in the 64K to 60K support areas. I would NOT be overly bearish in this scenario, it is more likely to consolidate recent gains rather than become a "bear market". Markets are NOT binary nor are they simple. Many forces are in play simultaneously and it would take a major catalyst to surprise the market in order to initiate a "bear market" or a broader correction.
As of now, there is a new swing trade long signal in effect from the 70,500 area. Since it is appearing inside a resistance zone, it is less than ideal and carries greater risk. This could be the beginning of the push the 73K test and fake out scenario I just described.
In situations like this, (trend continuation signals at unattractive prices) it is best to work on smaller time frames in order to compensate for the greater risk. Day and swing trades that carry LOW expectations. Like a push into the 71.5 or 72K area is within reason for these type of strategies. Expecting 80K, etc. is much less reasonable in terms of probability.
Another important thing to note: similar to the reversal zone from 73,5 to 76.5, there is a larger magnitude zone (not on this chart) that spans as high as 83K. Which means over the next few MONTHS, Bitcoin can probe this area before a broader correction ensues. IF we see this, the mega internet hype can be relentless and strongly placate to your GREED. Make sure to understand, markets move in CYCLES not straight lines. IF a correction begins from this larger magnitude fake out zone, it will likely be steeper and longer than most expect. I am not being bearish or pessimistic, I am simply pointing out the potential risk.
I understand how many can get frustrated with my warnings and claim that it costs "money" by missing out on greater valuations. This feeling is rooted in greed and all I can say is the market is a much more expensive educator than I am. Missing out has to do with how willing you are to take risk, and I learned the hard way that the key to this game is taking SMALL risks and is the position that I write from. There is no way to know where the market will be in the future, all we can do is MEASURE the potential and the RISK. From there only only you can decide how to go about participating.
Thank you for considering my analysis and perspective.
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