BTCUSD update: Price fluctuates around the 9861 reversal zone boundary as it breaks an inside bar in an attempt to go higher. Great price action if you are long, but as price continues higher, the risk of retrace increases.
Price is now pushing further into the 9683 to 10561 resistance zone (.618 of recent bearish structure). For the short sighted, it appears that price will continue higher and higher, which is possible, but more often than not, resistance levels attract selling. The 9861 reversal zone boundary happens to be inside this wide resistance zone which emphasizes the resistance even more.
Now keep in mind, there are plenty of bullish signs that are still intact which can present a very conflicting situation. Price is maintaining a clearly bullish trend line, and the 8514 support (.382 of current bullish swing) is still intact. With bullish momentum still in play, higher prices are likely. The problem is the level of risk.
When I mention risk, I am talking about risk in terms of initiating new swing trade longs. Buying within this resistance zone is like buying at 18.5K. Yeah there is some upside left, but if you are not nimble, or just distracted by greed, you will more than likely stay in the trade if it weakness sets in. Weakness can take this market back to the 8514 level which will be a perfectly healthy and normal retrace. Do you want buy now and take that chance?
In summary, temporary weakness can engulf this market out of nowhere, especially at these levels. Price can go as high as 10561 before any signs of weakness set in which can be very seductive. At S.C., we observe best practices which simply means we buy supports and sell resistances. As great as price action looks, the predetermined levels are what help us maintain consistency, even if it means sitting out during what appears to be "hot" market moves. We want to capitalize on the herd mentality, not be part of it and that means we wait for a retrace, no matter how far the market moves without us.
Thank you Marc. Your teaching is very comforting to me. I'm new to trading and always feel that I have missed many opportunities. But the more I am learning from you the more I'm becoming a better trader. You have changed my mentality from chasing after money to focusing on using my knowledge to make myself profitable and maintain consistency to a sound trading method. Really appreciate your time sharing your knowledge and helping community. Great work!
sumastardon
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If you snooze you lose. Right, Marc?
deactivatedaccount123
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This is a very well thought out piece of artwork, as usual. Thank you for the perspective, friend.
kardia
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I think it is wise to wait for a retracement, but if Bitcoin goes to 50k before the year is over, a thousand dollar difference won't matter all that much. There are no guarantees it will reach such heights, but it very well could go that high and higher. Nevertheless, I appreciate you stressing the importance of risk management. It's important that people count the cost before investing in anything.
EtherSwinger
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I'm outa here. Just sold by Ltc, got in at 135
thedude31
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I like you. But I got into crypto with money I can afford to lose. Let's gamble baby.
Commsky
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Patience with anything in life can be difficult, especially in this market.
kaskassa
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Hi Marc, thank you for your nice analysis, I am reading these as educational materials !
Can you plz let me know :" and the 8514 support (.382 of current bullish swing) is still intact" in your text, 8514 support derived from 0.382 swing, from what point to point is this swing? I could not find the points to match this figure. The swing as I can see was from 6800 to 9990. Please clarify for educational purpose. Thank you again.
reppac
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enjoy learning from you - thanks
There is a 1day RSI divergence on at the moment and also similarities with the end of 2017 in the StochRSI, so much so that I wonder if 7500-8500 support zones will be strong enough to hold.