Good morning, traders. I was wrong yesterday and it appears that Bitcoin had one more leg up. This is why I continue to stress the importance of risk management, not only in your entry but also in your exit. If you watch my morning live streams then you know I consistently discuss the importance of having your exits figured out before you enter a trade. This includes, as I have stated numerous times, that point at which the trade goes against you. Fortunately, my manual trailing stop loss was hit and I was able to still notch a 16% portfolio profit on yesterday's move down while I slept as a result. Sure, I missed the extra bit of upward momentum but I ended up with a significant profit for one day's trade and I can now look to short once more this morning.
Last night's move up touched the top of the TR which also happens to be the 4H R4 pivot as well as the target off the smaller wedge I discussed in the Tuesday update and noted as the red dotted line, though I believe I referred to it as dashed (tradingview.com/chart/BTCUSD/P0cOjcll-BTCUSD-15min-1D-charts-12-18-2018/). The 30 minute chart gives you an updated EW count which aligns with the slightly higher grey price tool target based on the larger wedge's width. The MACD histogram is already printing hidden bullish divergence as well signalling a possible last subwave up. However, we could see a truncated 5th subwave. The end of this first large wave, around $4220, would put price where we would expect it to be in terms of accumulation (between the AR and failed upthrust's high). For reference, please refer to the Wyckoff accumulation schematics. Furthermore, a 61.8% retrace from the projected $4220 high would be at the EQ of the light blue demand zone. Price would also be getting support from the ascending black dotted line. All of this strengthens the likelihood of yesterday's mentioned orange path, though the LPS would be about $100-$150 higher at that point. Based on this larger TR that we have been working with for a few weeks now, if we get a bounce from that blue demand, I believe the possibility of a Spring would be greatly diminished which means we could very well have seen our lowest point of this correction. Refer, specifically, to Wyckoff accumulation schematic #2 as a general guide. It also means that we should expect to end up back in the 2018 TR within the next few weeks at the most.
None of this guarantees that we won't go down further, whether it's just for a Spring or to even lower targets, but it does provide more support for the narrative that I am discussing. As such, traders must continue to concentrate most of their effort on their risk management. I have outlined the proposed path on the 4H chart.
As mentioned previously, yesterday's Fed comment that it will raise interest rates .25% gave DXY a strong initial bounce. However, the Fed sounded much less dovish than anticipated which caused the stock market to drop. This drop took price below the 2018 TR and I expect that we will see continues downward movement, at least in the near term though we should at least expect some sort of relief bounce before too long. I will continue to watch price action and volume to get an idea if price will make another attempt at the top of the TR or if it will find resistance at the bottom. Since that initial DXY pop, we have seen DXY continue its downward path as I mentioned we were likely to see. As a matter of fact, DXY hit my 96.20 target exactly as traders/investors seem convinced that the Fed will not raise interest rates in 2019 thereby taking the wind out of DXY's sails. As a result, the EUR/USD pair had a strong run overnight, topping out at 1.14857. I was in a short yesterday that hit my trailing stop before this move up late last night, which exited my position in a very small profit (nothing to write home about, but confirmed upward momentum), and I am currently watching price action as I look for an entry today.
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.
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If the current movement is playing out as an expanded flat for the wave 4 of a lesser degree, then this is the general count I expect. Ultimately, I am looking for wave 5 to complete in the red box. I don't believe anybody should be buying right here but traders need to do what they believe in. For me, the risk is too great. I'm waiting for the confirmed reversal to short down toward $3500-$3600.
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Monthly hammer is in progress at this time. Hammers usually print on Springs and signal a reversal. If December closes out as a hammer, then there is no reason to worry about further downward movement for at least a few months. We also note the large red wedge printing as well as the possible $16000+ target based on it if price pushes outside the wedge's resistance within the next 3-4 weeks.
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And here's the mid-term look that I generally expect if things continue bullishly. Notice how the waves line up with demand/supply and the 5th wave aligns perfectly with the HVN on the right? The confluence is significant.
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But, of course, none of this guarantees that we will see it play out like this. Risk management remains the most important part of any trader's trading plan.
Absolutely amazing observational skills as per usual. Even a noob like me can understand the level of confluence in your analysis at the same time as understanding the level of difficulty to spot these confluence. As always i am very impressed by your style. Thank you for putting out such great material my friend!
Boon2
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BTCUSD H4 Correction up. Checkout the idea detail's and update's for the complete picture!
Gregorioo
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and really what will happen to this BTC because every post is a different comment. There is a chance that until the weekend I see 5K ??
Chris_Inks
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@widmo, I'm not sure what you are saying/asking. Which posts are different comments? They all refer to the current BTC bullishness IF it plays out, showing different TFs thereby showing people how it would all come together as it did.