I had a good stream this morning and went over all this but I wanted to get a new chart up showing my thoughts for the day..... I closed out my two long positions last night at $8300 (a leveraged long and a USDT/XBT buy in long). My signs for this were a few things:
1) Our Heikin Ashi candles were slowing down momentum
2) We were heavily oversold RSI
3) We were approaching the .786 (take profit) FIB
4) I had my positions open for 48 hours and I wasn't prepared to leave them open for a 3rd night while I slept
That being said, we went steadily down and were being held off the 200ema very nicely. $7883 is the 200ema currently so that is the price I'm keeping an eye on. I would like to see us start to form some doji and green Heikin Ashi which would signal another long position. If we break under it, I would consider shorting. KEEP IN MIND we are still in a down-trending market, so longs are always more risky than shorts. I'm happy thus far considering this downward move a consolidation, which was much needed due to our high RSI. So far we haven't done anything out of the ordinary that would get me scared, but again, keep an eye on that 200ema mark. If we break the 200ema, we have a few more supports holding us up:
1) $7737 - .5 FIB & top of the cloud
2) $7489 - Kijun (yellow line)
3) $7427 - .382 FIB
These are all good price points to watch. You don't want to enter a position when we are about to hit a resistance or support line because the risk of a bounce is much higher at those points. It's safer to wait to see if we break it, and then enter the position. If we do bounce back off this 200ema and start going back up, the next resistance point is again, our local high and the .786 FIB (around $8488).