MarcPMarkets

Bitcoin: Next Support Levels To Watch For Reversal Higher?

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Resistance zone prevents Bitcoin from pushing higher which is NOT unusual since this market is STILL IN A CORRECTIVE CONSOLIDATION. In fact, the 11650 low of the previous inside bar was taken out, generating a new sell signal. Both of our swing trade ideas reached their respective targets days ago, and all we maintain now is inventory from an average price in the high 6Ks. The goal of this article is to provide perspective on what we are looking for NEXT in order to get back into a new swing trade.

I have to point out, even though a sell signal was triggered, we have a VERY strict policy of operating LONG ONLY strategies in this particular space. We often get criticized (by very INEXPERIENCED participants) for "MISSING OUT" on numerous opportunities on multiple time frames by keeping a focus on longs only.

Guess what? We learned a long time ago that you DO NOT NEED TO BE IN EVERY MOVE in order to generate a positive long term performance. Focusing on one side eliminates risk and a whole plethora of fakes out, noise and other adverse situations that only prove to ERODE capital over time. I need to repeat this often: LESS IS MORE in the arena of short term market timing. Guess what else? Staying on the side lines COSTS NOTHING, whether we are right, wrong, or MISS A BIG MOVE. Meanwhile, our capital is perfectly preserved for the next HIGH probability opportunity that FITS OUR CRITERIA.

Now at this point, many analysts and "experts" will be calling for shorts. Here is what you need to consider: the broader trend is bullish , as evidenced by the large 5 Wave impulse that peaked near 14K . This means smart money will most likely be looking to buy pullbacks, NOT SELL INTO THEM, even within a broader corrective consolidation like Bitcoin is in now. Selling or shorting into such a situation therefore carries ELEVATED RISKS. Support can always show up randomly, but probabilities point toward specific levels.

The levels on our radar are the 11,000 and 10,150 regions. These are the locations we are watching for new reversal patterns such as pin bars, or inside bars. Since they are proportional to the recent bullish swing, they offer a higher probability of reversal AND more attractive reward/risk compared to a random support level .

The question we often ask: is this still Wave 2 or is Bitcoin in the very beginning of a broader Wave 3? Since we require a breakout above 14K to prove this market is likely in a Wave 3, we have no choice but to continue to expect Wave 2 behavior to continue. This is why we ANTICIPATE fake outs, respect our targets, and look to buy at particular support levels rather than buy on hope, or some other irrelevant opinion.

When Wave 3 proves itself, not only do we expect a run to 20K, but we also know there will be continuation patterns along the way that will provide entry opportunities for swing trades. We do NOT fear missing out, because we know there are no limit to new opportunities. The key is having specific criteria that defines the reward/risk and general probability. There is NO precision in this game, but there are general guidelines that offer enough perspective to align with the market consistently, NOT RANDOMLY.

In summary, there is NO NEED to over react to Bitcoin pulling back. Do NOT get all caught up in the over the top bearish sentiment that appears, because there is NOTHING in the market structure at the moment that justifies expectations of price going below 9500. Just because price has retraced a few hundred points means VERY LITTLE relative to the bigger picture. NO MAJOR SUPPORTS have been compromised, and nothing on the broader price structures have changed. In this environment, pullbacks offer an opportunity to buy, because that is what the broader market structure favors, just not at ANY price.

Either way, to improve your game, developing your own set of criteria will do you better than any internet expert will. It should not be complicated, and it helps if it is built around a proven frame work like Elliott Wave . I cannot provide specific timing in these articles, but I can tell you how we generate sensible ideas. You will never make any real progress until your decision making process is rooted in some form of a structured routine.
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Comments

You are one of the few on TV to whom I pay close attention. Your words have the ring of truth and wisdom.
+10 Reply
Very well said!!! Traders should read this twice if not three times. Jewels were DROPPED.
+2 Reply
DO NOT NEED TO BE IN EVERY MOVE ....

exactly!!!!
+2 Reply
Excellent short term set up Marc. Do you think such movement matters though when long term dynamics such as the one below take place?

+1 Reply
Looks like we have a ranging bubble now
+1 Reply
@Jolgan, suckers' rally almost done
+1 Reply
I think we have nothing to fear.

I think price will break down but rally back further than before.
The small short is viable but risky.
+1 Reply
This 11150 looks like resistance turned support. If the 11k area is a possible area to take a long what types of a activity in the price action do you look for to confirm this. Certainly run ups from her look to draw in buyers only to see a move below so what do you look for that put the probabilities in your favor to buy in here?
+1 Reply
@AvgJoe2019, check out my current ideas I am currently on my way to writing a thesis on these ideas respectively.
Reply
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