BITCOIN | Prepare for it, a possible short-term SELL opportunityHi,
It looks like I can make another post before Christmas because my previous idea has started to work pretty nicely. As promised, I make an update if it happens and currently, the Bitcoin price has started to approach my mentioned key area ~$8,000.
At the moment, we are quite far from it, actually not so far but still, we have time to prepare for the next moves. Recent price movements and recent price action criteria indicating that we may see SHORT-TERM rejection from the marked red rejection area - rejection from The Red Christmas House :)
Set your alerts on.
I like what we have seen after the bullish Engulfing on the Daily chart. We got that Engulfing-momentum which pushed the price a bit higher to the next milestone - above $7,500. Everything looks bullish but we might see and we can catch a short-term downward movement. Movement range should stay between $250 to $600 but you have to be prepared with alerts because if this current bullish move is serious then this short-term bearish move from the marked reversal area may be a quick one.
Resistance criteria.
As said the rejection may be a quick one but still, you should already know the most accurate movements you get after bearish candlestick patterns. The current situation should be quick and that's why you can search bearish candlestick patterns from the 1H timeframes.
The Christmas House consists of:
1. Fibonacci retracement 38%
2. Fibonacci Extension 162%
3. Super-strong light-blue horizontal price zone should act as resistance. Multiple rejections to either direction from it.
4. The round number of $8,000 should play an important role inside the red short-term reversal area.
5. Minor black dotted trendline worked as support and now it should work as resistance and definitely, it adds a bit strength to the area.
6. Trendlines from the 2019 top. There are different types of trendlines from different tops that "run" trough the marked red area. They are a bit subjective, that's why they aren't on the chart but still, I want to mention it, you can try to drag them by yourself.
7. AB=CD. This is probably the most important criterion and it stays around $8,060.
8. Parallel channel projection. It runs a bit away from the crossing area but if the pump occurs today or tomorrow then we can count this as resistance but if the price reaches inside the marked area around 25. Dec. then it is not valid anymore - a bit late for parallel channel upper trendline to start to work for our favor.
9. Different types of EMA's. Weekly EMA 50 is just below the 8k, Daily EMA 100 and 200 are just above the 8k. EMAs are nicely inside the marked reversal "house" to add strength to the area.
10. Wait for bearish candlestick pattern formation. This time the move may be a pretty quick one so, wait for it from the 1h timeframe (obviously, you can wait for those on 4H because then the pattern signal would be stronger). From strongest to weakest: Evening Star, Bearish Engulfing, Railway Tracks, Tweezer Top, Shooting Star, Spinning Top. If you don't know them then Google helps you out!
Trade execution
Personally, I try to react immediately after the price has reached around $8,200-300 - do not try this at home because it requires a lot of knowledge :)
If it doesn't reach there and if it has formed a bearish candlestick pattern around $8,000-$8,060 then I try to enter after it has shown a pattern - easy as that. As said on my previous idea post; trading is quite boring, determine the area and let the price action guides you into the trade.
If it doesn't reach inside the marked red area then nothing will happen - no trade, no loss, no win and let's determine the next high-probability reversal area, plus here is a pretty high chance that you got knowledge from this post for your further trading plans! ;)
Be patient!
Do your own research and please, take a second and support my effort by hitting the "LIKE" button, it is my only FEE from You!
Happy holidays,
Vaido
