Bitcoin Playbook from 2017 Repeating Itself to $20,000 Again?
Hey traders!
It looks like our counter trade strategy worked and we nailed the perfect entry zone at $7550-$7650 zone based on the previous analysis when everyone was bearish.
Now, I'm seeing the same bears coming out of the wood work looking to short this $9400 resistance zone.
I would be very cautious as a big move is definitely looming.
It's easy to be bearish when most of the technicals are pointing to it.
"Overbought" "Bearish Div" "Funding Rates" "Thin order books."
These bearish terms are getting thrown around quite a bit ever since we hit $5,000 levels.
I remember hearing much of the same sentiment back in 2017 when Bitcoin was on its parabolic trend.
Right now, shorts are going back up, funding is getting back to neutral. Open interest is up massively and the CME interest is setting monthly records.
I still see a lot of bearish charts on Twitter and Trading View calling for a massive pull back.
In my opinion, I think we can look to 2017 for more clues as to what the price action is going to do.
Here is where we are right now.
Rising wedge on low volume coming up into the swing high price action at exactly the .382 fibonacci level from the high to the low.
Here is what we looked like in 2017
As a trader, it's hard to get an entry during a parabolic rally. For that, you really need to use lower time frames like 15 min - 30 min.
On the 30 minute, we've been supported by the 200MA and the 200EMA for the past several days.
The playbook from 2017 showed a high volume break out to $11,300-$11,500 zone and a massive sell off back down to $8500 - $8700 zone.
That's where I would set up a short hedge.
The same level that we have now as the .5 fibonacci zone drawing from $20,000 to the $3200.
These fibonacci levels have been acting as key support and resistance for this entire move so far.
The .5 fib also lines up with previous peak in 2018 that rejected Bitcoin.
We can also see the RSI is acting very similar on the daily with strong support at 45 RSI.
We also had a similar bearish div that we have now that everyone is pointing at as a major catalyst for the bitcoin downturn.
The problem is that in a bull market, these aren't as reliable as they are during stable markets.
Again, this market is moving very quickly and is very high risk, so make sure that you are setting a stop loss and managing your risk no matter which direction you decide.
I will change to a bearish bias if, **and only if**, the trendline breaks and closes on a daily chart.
There is never anything wrong with taking out a 1x short hedge at key levels of resistance, but just make sure you're hedging against it.
Let me know what you guys think and whether or not you believe a massive move to the downside is on the order books or do you think we're going to see a break out like back in 2017!
It looks like our counter trade strategy worked and we nailed the perfect entry zone at $7550-$7650 zone based on the previous analysis when everyone was bearish.
Now, I'm seeing the same bears coming out of the wood work looking to short this $9400 resistance zone.
I would be very cautious as a big move is definitely looming.
It's easy to be bearish when most of the technicals are pointing to it.
"Overbought" "Bearish Div" "Funding Rates" "Thin order books."
These bearish terms are getting thrown around quite a bit ever since we hit $5,000 levels.
I remember hearing much of the same sentiment back in 2017 when Bitcoin was on its parabolic trend.
Right now, shorts are going back up, funding is getting back to neutral. Open interest is up massively and the CME interest is setting monthly records.
I still see a lot of bearish charts on Twitter and Trading View calling for a massive pull back.
In my opinion, I think we can look to 2017 for more clues as to what the price action is going to do.
Here is where we are right now.
Rising wedge on low volume coming up into the swing high price action at exactly the .382 fibonacci level from the high to the low.
Here is what we looked like in 2017
As a trader, it's hard to get an entry during a parabolic rally. For that, you really need to use lower time frames like 15 min - 30 min.
On the 30 minute, we've been supported by the 200MA and the 200EMA for the past several days.
The playbook from 2017 showed a high volume break out to $11,300-$11,500 zone and a massive sell off back down to $8500 - $8700 zone.
That's where I would set up a short hedge.
The same level that we have now as the .5 fibonacci zone drawing from $20,000 to the $3200.
These fibonacci levels have been acting as key support and resistance for this entire move so far.
The .5 fib also lines up with previous peak in 2018 that rejected Bitcoin.
We can also see the RSI is acting very similar on the daily with strong support at 45 RSI.
We also had a similar bearish div that we have now that everyone is pointing at as a major catalyst for the bitcoin downturn.
The problem is that in a bull market, these aren't as reliable as they are during stable markets.
Again, this market is moving very quickly and is very high risk, so make sure that you are setting a stop loss and managing your risk no matter which direction you decide.
I will change to a bearish bias if, **and only if**, the trendline breaks and closes on a daily chart.
There is never anything wrong with taking out a 1x short hedge at key levels of resistance, but just make sure you're hedging against it.
Let me know what you guys think and whether or not you believe a massive move to the downside is on the order books or do you think we're going to see a break out like back in 2017!
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