Bitcoin is stuck within a lower high consolidation that ranges between the 22K resistance and high 18Ks. Meanwhile, structurally and environmentally, NOTHING has changed. Basically this market is out of play until a new catalyst comes along. Let's talk about which way price is likely to eventually break.
The short term structure is BEARISH and the 22K level has YET to be compromised. This resistance is a LOWER HIGH within the context of the bigger picture. Lower highs often lead to lower lows UNLESS a new piece of information comes into play.
At this time, the broader price structure still favors a test of lows. Along with that, bond yields are inverted which is a bearish sign. What do treasuries have to do with Bitcoin? An economic recession is bad for the S&P and in case you haven't noticed, Bitcoin is correlated at the moment. On top of that, we have a Federal Reserve that is fighting inflation by supporting a rising rate environment, which further supports a very strong Dollar. These factors do NOT facilitate a bullish and highly speculative environment like we have experienced over the previous two years.
For Bitcoin to rally, (especially to nonsensical levels like some self appointed "authorities" are calling for), the economic environment NEEDS to be encouraging AT LEAST.
Even if Bitcoin manages to break the 22K resistance, it has many more levels to go before it proves that a change of trend is in play. For example, the 28 to 30K level (next major resistance) would have to be cleared at minimum.
I called a short the previous week off the sell signal that appeared near the 22K level. It pulled back into the 18Ks. IF you go back to that report, I shared an update the next day pointing out that it would be wise to lock something in even though there was no conflicting signal at that time.
Since then, a bullish outside bar developed and now price is trying to work its way higher. Could this be the rally everyone is waiting for? Probability is NOT in favor. The rational thing to do is cover the short for whatever you can and WAIT for the next sell signal. Your primary goal should be to mitigate risk, NOT chase profits. Greed is a liability of human nature and most retail traders/investors are not aware they are controlled by it.
If you are new to this game, instead of chasing false dreams and listening to cowards who hide behind fake names proliferate nonsense, take the time to learn how markets work. There is NO hurry, Bitcoin nor the stock market is likely to turn higher any time soon.
In order to make objective and effective decisions in any environment, you need to LISTEN to the market. You NEED to listen to PRICE. Markets are highly random and efficient which means NO ONE knows MORE than the market. That means markets cannot be forecast over long time horizons with any degree of accuracy.
At the same time, it is possible to isolate opportunities on smaller time frames that are associated with a reasonable level of risk. Charts are not perfect by any means, but there is enough information on a chart to make effective choices. Listen to PRICE NOT PEOPLE.
Thank you for considering my analysis and perspective. I hope you find it helpful.
This ~20k consolidation is messing with everyone's minds, everytime you see some green bars, Crypto twitter is calling for irrational numbers, everytime BTC is in red, they are screaming straight for 10k. I find it quite funny :) The best thing to do is just relax and maybe invest small, which is what I do these days (thanks to Marc and he's streams, and some other fellow from my country).
Gunslinger2005
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@alexferdean, is this any different than any other time?
alexferdean
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@Gunslinger2005, yeah people exaggerate all the time, you're right :))
Gunslinger2005
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I thought 15k likely this week.... as you suggested.... several weeks ago. glad I bought 19k
@Gunslinger2005, likely means likely! Do not forget that Marc warned of the drop from the 60KS to down here while you have been dollar cost averaging all the way down. You may have to wait a few days more to see the 15ks. There is no difference in dollar cost averaging BTC at 19k or 21K because we, his followers have avoided buying all the way to down here. So if you cannot show your respect take your bitterness somewhere else.
simplejoe1
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@Gunslinger2005, it's a gamble that paid off this time. but eventually the house wins
cache_that_pass
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I agree. I'd like to include a couple of pieces of interesting information in addition to the author's points.
One of Larry Connors' books I read (I do not recall the exact one) provides research data as to why it is not profitable to buy on strength/tops. He crunched years of data and found that the S&P and the Nasdaq 100 (which Bitcoin is still highly correlated with) will usually trend downward 5 days after trending upward 3 days. The nasdaq 100 has had 3 consecutive days of closing higher than the open leading up to this weekend. Therefore, it is likely (not certain) that it will start dropping tomorrow, which usually takes Bitcoin down right along with it. So when the markets open tomorrow, I am leaning bearish as well.
I also believe BTC is in the midst of a false breakout, which institutions & smart money are creating as a means to heavy-short Bitcoin.
We are supposed to be heading into one of the heaviest recessions in the last 50 years, there's no way it's already over. Any bullishness is temporary and sure to be followed by my massively upsetting moves.