BTCUSD: Lower High To Failed Low? Or New Low?

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
BTCUSD update: Price establishes a pin bar at 6425 which emphasizes the relevance of the 6805 reversal zone boundary. Now is when things get tricky because this market is not in the clear yet when it comes to broader bullish momentum. The 7492 resistance level is still intact as well as the nearby bearish trend line . What does all this mean?

The broader bearish momentum is still intact and will be until the market proves otherwise. If you had the risk appetite to enter the market on the lows, then you got good prices in the face of total uncertainty. Buying now for that same reason presents increased risk because if the bearish momentum stays intact, you will be getting the worst prices AND having to take the pain or get shaken out if this market retests the low which is VERY POSSIBLE. This upward move, as welcome as it is, has not proven itself yet.

To prove that the bears are losing control. price needs to: close above the bearish trend line and close above 7492 which is the .382 of the most recent bearish swing. IF the market can meet these requirements, that is still not enough for me to get long as a swing trade, or even add to my position trade. After the break, I want to see a subsequent higher low or failed low formation. Whether it is shallow or goes into extreme low territory near 6K, that is the move that I prefer to buy into at this point.

Waiting for the higher low scenario will not give you the best prices, BUT it will help filter out buying too early. Timing this is not perfect, and it would be preferable to see that higher low initiated by another pin bar . Ultimately how you enter and what kind of risk you are willing to take is up to you. If you have no problem holding this market to zero, then buying anywhere near these lows is not a bad idea.

What about shorting? From a technical standpoint if I was able to short these markets, I would consider such a level for day trading purposes only. I must reiterate, holding longer time frame shorts at these levels is extremely risky, especially when some exchanges will not let you out of your position because of a liquidity shortage during a squeeze. Shorting on a day trade basis requires a ton of attention, and a very fast decision making process in order to decisively get out if you are wrong. Not a good idea for less experienced traders.

In summary, do not get sucked into the impulsiveness of these markets. From low to high, this market moved 1k points. People who do not know how to put this into perspective will look across all of the coins, see a lot of green, and proclaim, "The bottom is in!". In terms of structure, there is no evidence that suggests that the bearish momentum is losing its grip. According to the current structure in place, it is still within reason to expect a lower low or at least a retest of the low. The key to taking action is when the market does NOT do what it is setting up to do. It is setting up to establish a lower high which often leads to a lower low. If it can't make that lower low upon a retest, that is the evidence that reveals the bears are exhausted. Being that this market is in the middle of a major support zone , a failed low is a very welcome sign at such a location. I laid out the scenarios, now you must figure out your decisions in advance so that you are not reacting, you are instead following your plan.

Questions and comments welcome.
Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| | Cofounder (S.C.)

So yet again it's do nothing ?
For more experienced traders ony - over 1400 points won yesterday alone. Seriously, too. Go check
Capitulation in inevitable.
Prepare yourself for the point of maximum financial opportunity.

+1 Reply
Each action triggers reaction. There is never just one.
Feels like it is heading lower. We have all heard Whales are manipulating this market so if this is really the case it would be wise to step aside and let this market take it's natural course. We have all heard the saying; "let the trend be your friend" when the market is going up so the same applies in times like this as well. Just has that wreaking ball feeling about it so I am staying well away from BTC for now. We will all know when this thing wants to go up and that's definitely not the case now.

Trade safe and preserve capital for sunnier days.
+9 Reply
Wolfgang34 dwk8081
@dwk8081, can not argue with you. Whales seem intent on bringing this down one more wave. I’m thinking down to $3-4K range. They don’t want it any lower because it could cause permanent damage to the market. For now whales make money off of selling BTC against short futures contracts. This only works so long. When price gets low enough or enough positive catylists hit the markets the reverse will happen. They will start buying futures contracts and buying BTC against it.
+1 Reply
@Wolfgang34, 3-4k is too much. Around 5k probably. 3-4k would deal a lot of damage to the market .
marco8484 CryptoCyberpunk
@MiljanMarkovic, Damage to the market: Didn't we hear that already at 10k...and at 8k...? Once it rebounds, and makes say 80% in 3 weeks, it will be all over the news, and we will all be back "to the moon, to the moon", regardless whether this happens at 5k, 3k or 1k....
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