Bitcoin: Wrong Retrace For Long.

21 août 2022

The 24K resistance AREA is NOW established as a LOWER HIGH. I wrote about this scenario specifically in my previous article and described what the short setup would look like. Are you short? Here are some important considerations for the coming week.

If you are short from the 23,500 level, by now it would be wise to take a partial profit. I also wrote about this specifically in my previous article in regards to the 20K whole number support AREA. 20K is a key level and buying activity had a greater potential to appear, and it has.

Is the current price a good place for a new swing trade long? Not for a swing trade. Now that 24K is a lower high, a lower low is more likely to follow in the coming week or two. A lower low can see price revisit the 17K area or possibly the 14K support which I have been talking about for WEEKS.

For smaller time frame traders, a retrace back into the 23Ks is within reason and can offer some small bite opportunities but expectations need to be MINIMIZED. If you love exaggerated stories and messages of hope about Bitcoin going back to 40K, there is plenty of misinformation available on the internet to stimulate your greed and fear.

As long as price trades below the 24K resistance AREA, BEARS remain in control. Based on the current price structure and economic context, LOWER prices are likely to follow. There's no HOPE here, only objective analysis. Counter trend trades need to be managed very carefully in terms of profit expectations because the potential is much smaller relative to the short side at this time.

Missed the short entry? The next best thing to do is WAIT for a retrace into the 23Ks followed by a setup OR wait for a momentum continuation pattern. What can the continuation pattern look like? At the moment, IF the next series of candles produces an inside bar, and the low is taken out after its close, then a momentum continuation pattern will be in play. Keep in mind even after such a signal, the chance of a fake out is high.

Why not short now? The risk around the current location for shorts is high. Even though the broader trend is bearish, and the short term momentum is bearish, temporary short squeezes are very possible like the one from 17K to 25K. You don't want to get caught at the bottom of a short squeeze, so WAIT for prices that offer greater reward/risk AND probability.

The skill in this game is recognizing changes before they are obvious. ANYONE can recognize a signal, but since the market is highly random and EFFICIENT, there is NO WAY to know if a signal will follow through. I have called 3 sell signals on Bitcoin over the recent weeks. The first two offered some profit potential, but the follow through was very limited and the reward/risk was not satisfied. That's the market, you don't question it, you accept it and adjust.

Thank you for considering my analysis and perspective. I hope you find it helpful.