Bitcoin: Correction Just Starting.Bitcoin is now correcting from the 73K all time high, just above my short term high probability reversal zone (upper blue rectangle). Prices between 64.5 and 69K were highly vulnerable to this type of move to begin with and coupled with the 10K retrace of two weeks ago, there was plenty of warning for investors who understand markets. I hope you were NOT one of those who were convinced this was going to 100K in the next month or so. As I have been pointing out repeatedly in my streams, the completion of 5 waves usually means THE PARTY IS OVER.
What that means is Bitcoin is likely to be in a corrective structure over the next few months. Corrective waves typically unfold in three legs. The first leg, Wave A, can find support somewhere around 64,500 OR the 60K AREA. There is NO WAY to know how the market will play out in advance. These levels were previous resistances which are now likely to act as supports. Buying after price action confirmation makes sense for day and swing trades, but these are FAR from ideal investing levels.
Markets move in cycles, NOT straight lines. Buying this too early (which many will do) will result in taking a lot of unexpected pain. IF 60K happens to break, you are looking at 58K, 55K and 52K areas for supports. These are points of reference to evaluate further.
In situations like this, particularly for swing trades, it is best to wait for some type of complex reversal pattern like a double bottom either on this time frame or something like a 4H (which is what my bot uses).
The coming corrective structure is NOT to be misunderstood as a "bear" market. It is more likely to be a bullish consolidation which can eventually lead to a positive break out. A great example of this is Gold. For a number of years gold has been in a higher low bullish consolidation and just recently broke out. During that time, especially at the break out attempts all the hype promoted "5K next month" nonsense getting people to buy into those high risk prices. Be prepared for the same nonsense with Bitcoin.
I often get asked "what is Bitcoin going to do next?" and the answer is I have NO idea. People who ask this are missing the point. Navigating the markets for profit has NOTHING to do with trying to figure out what will happen next. IT is about evaluating a range of high probability scenarios on BOTH sides of the market. This can be done with historical price information like we find on a chart. Once you have narrowed a reasonable range of scenarios, you can then prepare, and WAIT for the market to confirm which path IT decides to choose.Only then can your risk management plan go into effect.
Thank you for considering my analysis and perspective.
