Good morning traders. I hope my continued insistence on risk management over everything else has gotten through to everyone. Yesterday's surprise news -- the Binance "hack" -- was a good example of the importance of risk management. Price dropped just over $200, as a result of the news, which liquidated many traders. The positive side to this is that Binance will cover the lost funds so traders didn't really lose anything. Normally, we would've expected to see a $1000 drop due to the news yet we only saw a third of that, and this morning we have already seen price recover all but $25 so far.
During the drop, in our Discord last night, I mentioned that I wouldn't be surprised to see price rise back up and even make new 2019 highs pretty quickly. Why? Because accumulation has been occurring for quite a while which should mean that there isn't a lot of loose asset in the market. If much of the asset is in professional hands due to cyclical accumulation, then retail doesn't have the supply to cause price to drop significantly and stay down when they sell emotionally based on the Binance news. If this is the case, then the most likely result is that the professionals should be scooping up the retail selling. And here we are this morning, with a high that is just a few dollars off the price level when the news broke. Personally, I went long at $5772. I attempted to enter at $5720, after the 15 minute candle closed and confirmed a likely bounce, but couldn't get the order confirmed with the exchange until the higher price due to the overloaded servers. So I remain long toward my upper targets that I have mentioned numerous times in previous analysis.
The 1H chart shows a great reversal candle at the bottom of the drop. We can see that price ultimately bounced at the EQ of the May 3rd TR with the candle body being supported by the HVN at $5750. Note that the volume associated with this reversal candle was greater than the volume associated with the supply candle prior to it (demand is stronger than supply). But even that supply candle's volume was less than the volume of the similar $200 supply candle earlier that morning. This tells us that there isn't as much interest in selling at these lower prices which generally means that price is ready to continue moving higher. I have relabeled the recent price action to better fit the activity seen last night. Price is now back above the 21 EMA and the top of the May 3rd TR, and has reclaimed the ascending red channel's EQ, which is bullish. It should also be noted that the move down also helped price possibly play out the 4H bearish divergence that was printing. If price can close above $5910, then I believe we will be seeing $6000 much sooner than later. I continue to watch for a close above the swing high at $5970.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.