Bitcoin price structure continues to point to lower levels even though this market is out of play. Out of play means it is a good idea to avoid it (especially on smaller time frames) until momentum reestablishes itself. In this article I want to point out some important considerations when attempting to time Bitcoin in this environment.
Before I get into that, here's what needs to happen in order for momentum to increase: Price needs to close above 20,500 or below 18,500. What you are seeing now is a consolidation. ANYTHING that occurs inside this range is pretty much meaningless in terms of the bigger picture. This is not a "bitcoin can go higher or lower" analysis, it's about knowing how to adjust when Bitcoin provides enough activity for profit potential. If you have an opinion, and you trade on it, you are placing yourself in a situation where there is at least 50% chance of being wrong. That's gambling and not an effective way to extract profits over time.
To better navigate this type of environment consider these points:
1. Gauging probabilities comes from evaluating price information (things you can see) AND environmental factors like macro fundamentals and market correlations (S&P). If you rely on a chart in isolation, you will not know how to weight scenarios or form reasonable expectations (and most likely get lured into fake guru hope appeals). Interest rates are still RISING (bearish for EVERYTHING) and stock market is poised to break lower. This means ANY bullishness in Bitcoin has very LIMITED potential as long as this trend continues.
2. Bitcoin price has YET to compromise a relevant resistance level. 22 to 25K is still intact and NOW there is a new resistance (lower high) established at the 20,500 level. Lower highs often lead to lower lows UNLESS the market offers a new piece of information like a resistance break. As long as this structure stays intact (macro fundamentals support this) LOWER prices are STILL in favor. While 18,500 manages to hold, it is less likely to continue if it is tested again.
3. Markets are HIGHLY RANDOM. This means NO ONE KNOWS where price will be in the future. THINGS CHANGE quickly. Markets are priced in terms of participant's perception of the future. Greed and fear are what move prices NOTHING ELSE. For these reasons, your focus should be accounting for RISK NOT profits. Probabilities currently favor lower prices, but that does not mean price will go to 5K. Currently 14K and 17K are the support levels within range. Account for these, ESPECIALLY if you are trying to accumulate inventory for a longer time horizon. This also means relying on things like oscillators, or conventional logic will NOT help you. You will NEVER know more than the market unless you have inside information.
If you are flat, there is no reason to be in a hurry to take any action until the market at least shows signs of momentum. There is nothing wrong with WAITING for some form of clarity.
Thank you for considering my analysis and perspective. I hope you find it helpful.
I really like your analysis and way of thinking. Many times that's exactly what i need to hear and be remembered of. Thanks
Free_Loader
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Thank you Marc for your weekly analysis. Indeed, the stock market seems poised to break lower, and banks and bonds are starting to get very nervous with DXY continuing higher. Stay patient and cautious.
For those interested, Marc has his LIVE STREAM weekly, on Mondays @ 3:00PM Eastern Standard Time, both on YouTube AND TradingView. Join for detailed Bitcoin analysis and have your favorite stock evaluated.
Solldy
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Great publication. Graphic analysis as if from textbooks. You can see that you have worked through several timeframes, the older timeframes also confirm your arguments. Thank you for your work!
PalenTrade
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Check out my update on great mentors who helped me on my journey
PalenTrade
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Nice analysis!
Ahmedramzy81
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Thanks for the great content as usual, I would like to ask you , what you're expectation for Bitcoin in the long time horizon? and what do you think about investing in the Mining companies such like Mara,Riot,Corz...etc as prices already down so much? Thanks for your kindly advice
ProjectSyndicate
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range game is over. get ready for the dump.
FrIlledFish19369
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Thanks Marc for your time and hard work as always. Really looking forward to the live stream later today. Greetings from Milan. Chris
DescryptoAdri
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Excellent article as usual. What happened to @goldbug1 ? He used to publish some awesome analysis and somehow I find your style very similar.
vnaeli
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The notion that price can go either direction meaning 50% to 50% chance is misleading. You don't have to twist logic that far to justify your wait-and-see strategy.