Bitcoin: 14K Support Test In Range.

10 juil. 2022

Bitcoin has tested the 22K resistance area and rejected it followed by a new sell signal at 21,170. The environment and price structure both favor lower lows still. A break of the 17K low and test of the 14K support are still scenarios that are possible for the coming week. How best to use this information?

First, it is important to comprehend that trade decisions and forecasting are two separate processes. If you are still trying to figure out the “next” move, going on hunches about the next move or following people who “claim” to know the next move, then you should be prepared to accept the random results that will follow. NO ONE knows more than the market (unless you have inside information). Anyone who pretends or speaks from an egocentric point of view is just fooling themselves and you.

Let’s talk Bitcoin for the coming week:

A new sell signal has appeared off the 22K resistance and is now active. The 22K to 25K AREA represents a minor resistance area. Structure (lower high) and context (economic environment) both favor a test of low or potential lower low. That means the 17K low and 14K support are within the coming week’s range. Profit potential can be gauged using this information.

RISK on this time frame should be around 3.5K points. This does not mean you have to take a full 3500 point stop. If a conflicting signal appears while the trade is in progress, you always have the option to exit earlier for a smaller loss. The trader mindset is about ADJUSTMENTS to new information, NOT “THINKING” or “KNOWING” where the market will go next. It is a passive mindset. If you assert your own feelings and opinions onto the market, it will eventually take your money.

IF a conflicting signal appears, (which means price is not as weak as anticipated) then there could be a more prominent short squeeze. Such a move can take price into the 25 to 28K zone. At this point, I would assign a low probability to such a scenario, but the possibility is within reason.

Timing markets EFFECTIVELY has more to do with how well you PREPARE for scenarios and adjust when unexpected information reshapes market intent. Instead of thinking about the “next” move, PREPARE for the reaction to the market’s choice. For example, a week ago price was pushing 19K. A potential scenario was a retest of the 22K resistance and that is what the market eventually chose. Preparing for such a scenario is what justifies taking a swing trade short off of the anticipated level rather than just reacting to everything.

Also note:

I do NOT short Bitcoin and I am NOT starting now, even in the face of a sell signal. The risk that comes along with using leverage plus other factors does not fit into my risk tolerance. There are plenty of other markets to short. Greed nor ego drive my choices.

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

13 juil. 2022

Note

For those who are still short, at the moment there is no technical reason to exit or taking any profit. Even though there is no reason, it's never a bad idea to take a little off if you have a nice profit.

Structure and environment still favor a test of low. If the current support is cleared, 17K is the next area to consider taking profit off the table.

Keep in mind, IF a bullish reversal signal appears around current prices or slightly lower, that would be good reason to consider an adjustment. Either lock more profit in, exit etc. Only you can determine how aggressive or conservative you want to be.

For those that are aggressive, this is the type of situation where you can justify letting the position ride, until a conflicting signal appears.