A lot of people dumped their alts to jump onto Bitcoin, expecting for BTC to rocket. Well when the majority expects something to happen then usually the exact opossite occurs.
BTC just broke out of the triangle pattern where all eyes were on, resulting in another dip on the cryptocurrency market and therefore shifting the sentiment a bit. Longs getting liquidated while shorts are on the rise again. 4h RSI and MACD got support to stop further dumping. To me it seems very possible that this is just a nasty shakeout before another big move upwards.
Buy:
~7676 (40%) ~7624 (30%) ~7556 (30%)
Stop-Loss: Below 7441
Trade active
⋅
On this next trade I´ll introduce hedging to protect our downside better, this is only possible with margin trading and you would need a second account on bitmex or bitfinex for that.
You could add a hedge trade here: Short: 7544 SL: 7656 (Same amount as put into the long trade)
Comment
⋅
Hedge trade got stopped out if you are on bitfinex.
The sentiment can create a price difference between bitmex and bitfinex which means in this trade SL is still in place on bitmex. Better to raise it here to 7712 if still ongoing.
Bitcoin has always bounced the last few months when the 4h RSI has reached 20-25 level so this long is definetly still in place. A real confirmation of the continuation of the downtrend would be a break of the 6800 level.
Trade active
⋅
There are 2 scenarios that could happen right now:
Bullish view 1. BTC going to bounce. With my long trade I was setting SL below the 0.382 fib which is holding right now. In case it breaks it could bounce at one of the levels between 0.382 - 0.618 (last line of defense), we could lower SL to bank on the bounce but then we would be setting us up for quite a lot of risk. The upside target however would be 10k+ so risk/reward ratio would still be quite good even if we are looking for the bottom. If 6800 breaks then the bearish view is fully confirmed.
Bearish view 2. BTC bounced of the white trendline and is going to test the white support line again. Then we either would bounce off there or fall even further.
Comment
⋅
*Bullish view 4h RSI is below 25 so a big bounce is still definetly possible.
Comment
⋅
*Full size bearish view
Trade closed: stop reached
⋅
Both trades got closed on stop-loss. There was some unexpected FUD through Okex and when that happens FA beats TA. BTC now held the 0.5 fib line at 7279.2 perfectly. Only if 0.618 fib is breached then downtrend continuation is confirmed.