BTCUSD Update: 7530 all time high is reached as this relentless rally continues. The question is what is how much higher can it go?
One extension is taken out after another. The next price target based on an extension projected from the bottom of the most recent bullish structure is 8271 (the 2.618 extension). Yes it is hard to believe price can make it that high, but this market does not care what we believe.
At the moment, there is not much on the chart that shows any signs of immediate weakness. Pull backs are shallow and no where near any major support levels. This is why I have been saying in order to trade this market and keep your risk low, it is important to stay focused on the smaller time frames where you can make adjustments quickly. There are opportunities both long and short if you have the plan and the agility.
As far as shorts go, this market reminds me of the Dow futures back in 2007. At the time, the market was relentlessly strong and I felt that the strength was simply unjustified. So I was shorting it and getting hammered over and over. It was pushing 14k which were all time highs. Eventually the market sold off, that was some time in 2008. I was a little early.
The lesson that I learned besides not to short a market pushing new highs is this: If you are going to short the bigger picture, at least wait for some form of structure like a double top on a large time frame like a 4 hour or above.This may require a ton of patience, but even if you are wrong, and the market still goes higher, your chances of a profitable outcome are much better.
Shorting a market on new highs because you feel "how much higher can it go?" is a bad reason to be short. If you want to see a great example of a market that offered structure for bigger picture shorting? Look no further than the EURUSD on a 4 hour or larger time frame. Head and shoulders after head and shoulders. That is what a bigger picture short looks like.
Now if you are day trading than you can get away shorting as long a you are taking your profits quickly. A shallow retrace for this market is 300 points, which offers plenty of opportunity for this type of strategy.
As far as my plan for this market (since I am looking for longs only), I would like to see IF price can retrace back to 6567 which is now the .382 of the recent bullish swing. While a break of that level can take prices to the 5798 area which is the .382 of the broad bullish structure. IF the market retraces to either one of these levels, that is where I will look for bullish reversals for a possible swing trade long. I do not expect a retrace of that magnitude until after the upcoming fork is out of the way. Also remember that in order f or a retrace like this to unfold, something will have to surprise the market. Just like the Chinese government nonsense over a month ago. Remember that? Yeah neither does this market.
In summary. strong markets like this are not driven by logic, and as one trader wrote in a previous comment, "Noone wants to buy the top" so it tough not to get involved one way or the other if you let your emotions get the best of you. Taking swing trades at these levels is high risk long or short (unless you don't mind taking 1k points of pain). Day trading is where the best opportunities are because you are looking for small profits (30 points is small). In terms of proportion, this market can see the 8k level, especially since there is no real selling signals to speak of. My plan as I have written before is to wait for a retrace back to one of my projected levels and look for reversal from there for a swing trade long. No need to get emotional, just a matter of waiting.
I believe we are in a sort of market vacuum right now where the price is artificially high due to people holding for Segwit2x as well as constant influx of new buyers in the market, AND larger players pushing this momentum into a huge upward move. Everyone sees it going upand knows something is a bit strange with this price action. This might be one of the last chances for the market whales to control the market so fully as CME coming into play later this year. Effective market hedging should give some protection again massive price movements...It will not sell off before Nov 15th and there is a constant gentle push upward by overall buying trend. Look for all hell to break lose around Nov 15-20 after the fork. We really don't know which side will win at this point. Seems like current Bitcoin classic is favored but from the outside we don't know the underlying agreements that have been made between the major influencers, whales, and the minors. We could be in for a surprise, as we all know anything is possible. So While I am not going to short this market, I am getting longer either as the risks are just simply too high and higher it goes the bigger the correction will need to be.
Iruwen
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@lewistz, I agree, people just don't realize how dangerous the 2X attack actually is. Or maybe I'm just overemphasizing because I read too much about it. At least all exchanges will make sure their customers are protected, so 2X might die right away with no mining power as miners have to follow price to cover their expenses.
Hi Marc, I agree. To everyone experiencing FOMO right now I suggest we look at past price action. There GAP needs to be filled at some point which will present a good entry point for long position:
Eblocc
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@SecondMouse, good insight 6250$ looks like the buy in
@mycotoxin, everyone should do it at the same time.
Eblocc
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Yes I agree with your position. Too many times have I shorted this market. I'm beginning to realize that Bitcoin is still undervalued and has yet to receive the appreciation it deserves. Really the big thing to figure out now is what will crash this market to fold in price?