Are you managing your risk properly on Bitcoin?
Fellow Fools, traders, and crypto enthusiasts. I hope you read our last analysis on Bitcoin. We posted our last topic of “Are we going to get a pullback in BTC?” and quickly got a retrace back down to the $30,000 area. When pullbacks like this happen we want to address the question of, are you managing your risk properly? If you are currently panicking or concerned about this with this recent dip, the answer to that question is probably a “no”.
At the present moment, our thesis is this.
Stage 1 – The initial pullback (which we have already gotten)
Stage 2 – BTC moves sideways as alt coin’s set up for larger rallies
Stage 2 or 3– The reason we have 2 different stages on here is that we could see BTC either move sideways or possibly dip further. A lot of the ALT coin charts have reached very oversold areas. IF all the altcoins rally and people take profits once that phase is completed while BTC is still moving sideways, we could see a sharp dip across the board in the crypto market. What this also does is it create’s a massive springboard for BTC to launch much higher from. Here are some examples of oversold coin charts in relation to BTC.
Stage 4 – Acceleration
Stage 5 – Profit-taking or Distribution
Let’s examine why BTC could dip.
Current signs of a Bearish Scenario:
• Price is still very high, everyone is in profit
• RSI showing divergence on the daily and is oversold on the weekly
• The Dollar is currently at it’s low from 2018 and a rebound could cause BTC to tumble or stall
• While there is institutional interest, it generally takes months for them to act, research, etc…
A dip to $20,000 could happen if we form a “local” lower low. This would be the first indication that the Bears have the possibility of regaining control. We would be looking for slower and longer rebounds as buyer’s start to dry up. What happens after we get there is anyone’s guess but it would be the first sign that we could possibly retest the $20,000 area.
Current sign of the Bullish scenario.
• Lots of institutional interest
• strong MACD and RSI
• Money printing, a world in turmoil
• During Bitcoin’s last run we saw subsequent retraces of 30% before the next rally, this could be just another fast retrace.
Right now it’s possible if our stage 2 or stage 3 play out that we simply keep moving sideways from here until we start to ramp up again. There is enough institutional interest that this could happen. This means we would be in for a very choppy market over the coming months.
The Good news.
In either scenario that we outline, we believe that BTC is in for a substantial run through the end of the year unless something fundamentally changes. The question is. Are you managing your risk appropriately to manage the POTENTIAL downturn to $20,000 if we get one? Make sure you are.
Until next time.
TCF
At the present moment, our thesis is this.
Stage 1 – The initial pullback (which we have already gotten)
Stage 2 – BTC moves sideways as alt coin’s set up for larger rallies
Stage 2 or 3– The reason we have 2 different stages on here is that we could see BTC either move sideways or possibly dip further. A lot of the ALT coin charts have reached very oversold areas. IF all the altcoins rally and people take profits once that phase is completed while BTC is still moving sideways, we could see a sharp dip across the board in the crypto market. What this also does is it create’s a massive springboard for BTC to launch much higher from. Here are some examples of oversold coin charts in relation to BTC.
Stage 4 – Acceleration
Stage 5 – Profit-taking or Distribution
Let’s examine why BTC could dip.
Current signs of a Bearish Scenario:
• Price is still very high, everyone is in profit
• RSI showing divergence on the daily and is oversold on the weekly
• The Dollar is currently at it’s low from 2018 and a rebound could cause BTC to tumble or stall
• While there is institutional interest, it generally takes months for them to act, research, etc…
A dip to $20,000 could happen if we form a “local” lower low. This would be the first indication that the Bears have the possibility of regaining control. We would be looking for slower and longer rebounds as buyer’s start to dry up. What happens after we get there is anyone’s guess but it would be the first sign that we could possibly retest the $20,000 area.
Current sign of the Bullish scenario.
• Lots of institutional interest
• strong MACD and RSI
• Money printing, a world in turmoil
• During Bitcoin’s last run we saw subsequent retraces of 30% before the next rally, this could be just another fast retrace.
Right now it’s possible if our stage 2 or stage 3 play out that we simply keep moving sideways from here until we start to ramp up again. There is enough institutional interest that this could happen. This means we would be in for a very choppy market over the coming months.
The Good news.
In either scenario that we outline, we believe that BTC is in for a substantial run through the end of the year unless something fundamentally changes. The question is. Are you managing your risk appropriately to manage the POTENTIAL downturn to $20,000 if we get one? Make sure you are.
Until next time.
TCF
Comment:
Previous Analysis "Are we going to get a pullback in BTC?"
Opinions on Chart's, not financial advice.
