Bitcoin: Sell Setup Retrace 20K?

Are you still waiting for 50K? While this kind of forecast is completely unrealistic and out of range, it is ESPECIALLY so in light of the new SELL SIGNAL that has appeared off of the 24K resistance following Friday's NFP outcome. As I wrote in my previous analysis, when 5 waves can be clearly counted, the move has likely run out of steam. While this is still a risky short, being long anywhere from 23 to 24K poses very high risk as well. This is a perfect example of when to avoid swing trades and mitigate risk by working with smaller time frames.

The next swing trade idea that I am WAITING for is the retrace into the next relevant support AREA between 22K and 20K (see rectangle on chart). If this support manages to hold, it can offer an opportunity to capitalize on a retest of the 24K, and possibly a push into the 25K resistance. This type of move can take weeks to unfold, and is relevant only to the recent bullish momentum generated off the 17K area low. I mention this specifically because when observed from the weekly time frame, the broader trend is still arguably bearish. The recent move in Bitcoin may be nothing more than an over reaction (short squeeze) following the move in the Nasdaq and weakness in the Dollar.

As long as 25K is not compromised, jumping to the conclusion of a new bullish trend is premature. This is NOT about profit, it is about accounting for RISK. It is important to understand that charts provide a very limited view of potential outcomes because of the assumption that current factors driving the market stay the same. Things CHANGE very quickly and a chart cannot account for unexpected news events in the future. This is why long term opinions are about as valuable as a pet rock. Many are extremely desperate for you to believe that they know something, when in fact that are only betting on the random nature of the market to make them look right.

Okay you get it, but what about all this short term movement? You hate to wait, and want action. That is what smaller time frame strategies are all about. For Bitcoin that can mean working with 4 hour, 30 minute and even 5 minute time frames. When working on such time frames, your risk/reward expectations must also stay in proportion to the time frame. If you mix expectations here, you will simply lose, a LOT. For example, 5 minute expectations average around 80 to 100 points of risk, while 150 to 200 points of profit are within reason. IF you expect MORE, you will get stopped out often. Smaller time frames are where the random nature of the market is most prevalent. An open mind and strong decisiveness are major requirements (A LOT of experience also helps).

Begin with 30 minute price structures, formulate expectations, identify your levels and wait for setups. I have streamed many examples of this.

Keep in mind you ALWAYS have the option to WAIT for a higher probability opportunity. This is why I always emphasize learning to judge for yourself rather than listening to those who are incapable of controlling their emotions, or push some other hidden agenda. Learn to listen to PRICE not PEOPLE. A chart offers limited information but it pays to know which information on a chart carries the MOST actionable value,

Thank you for considering my analysis and perspective. I hope you find it helpful.