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.
Could this be a wave 1 with a leading diagonal? Oversold weekly, approx 20k price. It just feels bottomy to me. I get that the longer timeframe price action is bearish but the price won’t go down forever. At some point it has to turn around, why not now?
Free_Loader
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@Sancho1883 As Marc would say, “feelings have no place in markets.” Price will rebound WHEN the FED starts easing their rate hikes and lower-interest money once again finds its way into the markets. For as long as inflation rages on and the FED keeps fighting it, there’s no reason to expect a turnaround in the cryptosphere.
Jamsie1
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@Sancho1883, I think there is a simple answer here: It could be a wave 1, but it might not be. These things reveal themselves when we have the benefit of looking back. No way to know going forward. I try to prepare for as many scenarios as I can imagine will play out, but also understand that the one I have not accounted for may happen.
Sancho1883
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@Jamsie1, I agree, a part of my preparing for those scenarios is to comment about things that stand out to me. Hopefully someone will tell me I’m 100% wrong and point out why. Until then you do what you think is best for your risk appetite
Jamsie1
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@Sancho1883, Yea absolutely.. I like the discussion and to hear what other people think. I'm not saying 'Dude, you're so wrong' or anything like that, because you might be right, so why would I. I am just letting you know how I think.
Jamsie1
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@Sancho1883, And for the record, I also think 20.8k is a logical place to go long because it is a double bottom and the bottom of a channel. The question is 'How far up will price go from here?' Top of the channel again? Maybe not. Considering it has just tanked to here why would it go up now? If it is going up it will screech up. My guess is down for max pain and because of some news that says crypto will be banned or something so people will be too scared to buy at even lower prices. The institutions might buy it all when retail has no money left to spend on crypto.
Sancho1883
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@Free_Loader I totally understand where you are coming from and I’m not talking about new all time highs. I’m talking about a higher high upto 32.5k. This could easily be a daily wave one. A retreat back to approx 20k for a wave 2, eventually having a daily wave 5 around the 32k mark. That would be a wave 1 in the higher time frames. When I say it ‘feel’ bottomy I mean I’ve observed the price action and I look like a possible scenario. This price isn’t a lower high until the price goes below 17k and it’s not a higher high until it goes above 32.5k. The dice are still being rolled. I’m long. I’m staying long until something really changes my mind. I may be wrong, but I hope I’m not.
Jamsie1
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@Sancho1883, So you answered your own question. The potential is a drop to 17k if this is a wave 1. 20.8k might be the low before a wave 3, but so might 19, 18, 17. Or wave 1 might start at 15, 14 , 12, 11 or 9. One thing that is finally sinking in for me after following Marc for a long time is: 'Let price be your guide'. At the moment a new high is over 25k and a new low below 17k. Everything in between is random. Although I would pay attention if I start to see a classic Elliott wave playing out. One that proves itself over a fairly long time frame. This is not long enough to say it is. It would just be a lucky guess.
Sancho1883
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@Jamsie1 “at the moment a new low is below 17 and a new high is over 25” - I like that.
Sancho1883
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@Jamsie1 from here to 29k, back to 25k then up to 33k. That’s what I can see happening. After that who knows. I agree that the max pain route is most likely. This dip has people screaming for 14k and after a 10% daily drop I reckon there are loads of shorts with stop losses set at 25k. A short squeeze could easily trigger a rise. When the herd sees the price rising they will all bundle in. Crypto isn’t logical, it’s all emotional.