elevatedinvestor

BTCUSD testing it's ALL TIME HIGH - Should You Buy Sell Or Wait?

COINBASE:BTCUSD   Bitcoin / U.S. Dollar
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Let's get into it.

First I'd like to preface this post with the fact that I took the entire month of November off from charts, I was travelling and very busy. With that being said, whenever I take a break from trading it usually takes me about 1-3 weeks before my mind is super sharp again. So take this post with a grain of salt as there may be a little "rust" mentally.

BTC IS TESTING IT'S ALL TIME HIGH.

There is no question that it's very likely to break this new high. But the question is do you buy, sell, or wait it out?

My answer is to wait. Here is why.

FIRST: You never want to "chase" price. As a trader we look to buy/sell assets at a discount. Just like a normal business owner. If you owned a car dealership, would you go purchase a new vehicle at face value then try and sell it at face value? No that would make no sense.

SECOND: VERY IMPORTANT! Let me ask you, at the all time high do you think people are closing their profits? or buying right now?....I think it is a bit of both. Investors will possibly take profits from this run, and sellers will want to sell from this prior "supply price." This makes for a key level (there are tons of eyes on it)....and what do lots of eyes equal? They equal traders getting involved. When traders get involved brokers make commissions! With people buying and selling their speculations, the brokers can rake in $. For this reason I think we may get some sideways action around the ATH , because brokers can do a lot of dealing around this price, more dealing means more money for them.

THIRD: I am bullish for 30k-35k BUT right now we have some interesting price behavior that contributes to the sideways idea. You will see that I have draw a yellow box on the chart. This box was an important move. It was a move that took out lows and then made a new high, this shows me that the smart money wanted to buy those lows up. However, it is the first significant low since October. This is important because this low can act as a good reference point for traders and I think many people will be sliding their stop losses just below it now to secure some profits and ride BTC up as far as a they can. With my system, I would prefer to wait and see this $16k low cleared before I buy again. That is just me though.

FOUR: CAUTION!

Holiday season does change the volatility , here's why. Let me ask you this:

What would you be able to swim faster in?

A pool of water, or a pool of molasses?...

Water right? ..


Well, the markets work in the same fashion. In the markets, price is the swimmer, and everything else is ORDERS. If there is less liquidity, a.k.a. less orders in the market, price can swim faster through it like water. But, if there are a lot of orders in the market price won't be able to slice through it as quickly, much like molasses.

Christmas is important because investors/traders/etc usually take time off during the holidays, and/or close their books for the year. This means less money will potentially be in the markets, which will allow price to move faster. So, there is a very strong possibility that price could just soar through this ATH and never come back. But personally, I will wait for a pullback, if we don't get one oh well. There's thousands of other things you can trade day in and day out.

Hope you enjoyed!

The purpose of my posts moving forward will not about about getting things right or wrong, they will be about "thinking" like a market maker.

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"You aren't trading the market, you're trading your beliefs."

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Comments

Great detailed analysis.
+1 Reply
elevatedinvestor CollegeofPips
@CollegeofPips, Thanks, could have made it a little more visually descriptive I think. But I appreciate it
Reply
good and quality information
Reply
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