Bitcoin - Tough Area & Key Levels to Look For
Bitcoin printed a bearish continuation after attempting to take out the 8500 level, implying a swing lower is more probable then a swing higher. There are some key levels to watch and trading in this area should be considered very aggressive for which it is wise to reduce your position size accordingly.
Bitcoin has been consolidating over the past few weeks between the 8000 and 8500 level. The longer the consolidation the more decisive the move is as investors and traders load up at the lower end of the range, and many traders sell into the upper.
The result of this type of consolidation is a strong break of the range. Of course the question is always, which way do we break? There are two levels we are watching closely and they are simply the upper and lower end of the minor range here at 8000 & 8500.
To be honest the risk is slightly to the downside here, as we have had nearly 3 weeks of buy action at the lower end of the range. On one hand this implies there are buyers stepping in and accumulating at these levels, on the other hand we may have more active participants trading the range in shorter time frames.
These active participants generally are what drives price action in the markets. The risk here is the market fails to find bids on the next swing down, triggering stops from shorter term traders, which can lead to a push into the 7200 area.
Is it possible to push into the lower 6k's or even retest the broader low around 3200? Sure it is, but based on what? Price action at 8350? A bearish pennant on a 2 hour chart? Seriously these types of calls are simply guessing and nothing more than click bait. Remember all the Gurus at 14k calling for a parabolic move to 60? Yeah now they are drawing more trends and moving averages trying to make sense out of a consolidating market.
The break lower from the upper 9k region was likely a flushing of late longs and those buying the lower end of the broader range at 9350. The market simply ran out of buyers and these longs got cold feet, along with swing traders hitting their stops creating a swift move lower.
I'm not sold that there are many more investors looking to throw in the towel here, and if anything this is an area where longer term investors are likely to start fading the market. Regardless 7200 is on the table and the probabilities favor slightly a move lower at this point.
But never give up on the bulls. The key level for the bulls to take out is 8500 or the upper end of the range. There was an attempt a few days ago, but it failed to hold and is now testing minor support at 8300.
What the bulls need to see is the 8500 level taken out and a continuation back to 9350 which would imply that weak hands have been shaken from the market and nobody is actively selling their inventory.
This will attract all the "portfolio managers", with a whopping 3 years experience, that are attempting to time the market with their entire holdings, thinking they will sell here and buy back lower. Worst thing that can happen is it works the first time and you become a FURU.
Honestly for long term investors there is nothing to do here but let the market play out. Long term is long term and unless you are throwing the towel in on Bitcoin and cryptos in general, we are likely to see higher prices.
For the more conservative trader, we want to see the previous high taken out or a test of the 9350 level and a broader higher low before taking a trade. The more aggressive trader is already likely in a position or can look for a minor bullish continuation pattern IF Bitcoin retakes the 8500 level.
Other than that it is simply a let the market play out period and there is nothing to do but wait. I know boring and you want some action. I'm sure there is a craps table that will take your money somewhere!
Bitcoin has been consolidating over the past few weeks between the 8000 and 8500 level. The longer the consolidation the more decisive the move is as investors and traders load up at the lower end of the range, and many traders sell into the upper.
The result of this type of consolidation is a strong break of the range. Of course the question is always, which way do we break? There are two levels we are watching closely and they are simply the upper and lower end of the minor range here at 8000 & 8500.
To be honest the risk is slightly to the downside here, as we have had nearly 3 weeks of buy action at the lower end of the range. On one hand this implies there are buyers stepping in and accumulating at these levels, on the other hand we may have more active participants trading the range in shorter time frames.
These active participants generally are what drives price action in the markets. The risk here is the market fails to find bids on the next swing down, triggering stops from shorter term traders, which can lead to a push into the 7200 area.
Is it possible to push into the lower 6k's or even retest the broader low around 3200? Sure it is, but based on what? Price action at 8350? A bearish pennant on a 2 hour chart? Seriously these types of calls are simply guessing and nothing more than click bait. Remember all the Gurus at 14k calling for a parabolic move to 60? Yeah now they are drawing more trends and moving averages trying to make sense out of a consolidating market.
The break lower from the upper 9k region was likely a flushing of late longs and those buying the lower end of the broader range at 9350. The market simply ran out of buyers and these longs got cold feet, along with swing traders hitting their stops creating a swift move lower.
I'm not sold that there are many more investors looking to throw in the towel here, and if anything this is an area where longer term investors are likely to start fading the market. Regardless 7200 is on the table and the probabilities favor slightly a move lower at this point.
But never give up on the bulls. The key level for the bulls to take out is 8500 or the upper end of the range. There was an attempt a few days ago, but it failed to hold and is now testing minor support at 8300.
What the bulls need to see is the 8500 level taken out and a continuation back to 9350 which would imply that weak hands have been shaken from the market and nobody is actively selling their inventory.
This will attract all the "portfolio managers", with a whopping 3 years experience, that are attempting to time the market with their entire holdings, thinking they will sell here and buy back lower. Worst thing that can happen is it works the first time and you become a FURU.
Honestly for long term investors there is nothing to do here but let the market play out. Long term is long term and unless you are throwing the towel in on Bitcoin and cryptos in general, we are likely to see higher prices.
For the more conservative trader, we want to see the previous high taken out or a test of the 9350 level and a broader higher low before taking a trade. The more aggressive trader is already likely in a position or can look for a minor bullish continuation pattern IF Bitcoin retakes the 8500 level.
Other than that it is simply a let the market play out period and there is nothing to do but wait. I know boring and you want some action. I'm sure there is a craps table that will take your money somewhere!
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.