BTCUSD Perspective And Levels: Euphoria Prices.

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
BTCUSD Update: New high made at 5420 which is just above the 5385 level which happens to be the 1.618 extension of the entire recent bullish swing. This is pure greed and euphoria in action, and for those who do not know yet, a hot market usually cannot sustain this rate of momentum.

I have been cautious up to these highs and I am staying away from any new swing trades in this market at these levels. Yes, new all time highs are certainly a bullish sign, but risk of retrace is way too high at the moment. Based on the current structure, the first reasonable level for a normal retracement is 4914 (.382 of current bullish swing). Price can retrace to this level and this trend would still be intact.

And the 4914 is a minor support, because the structure measured is the most recent swing. IF this level is broken, 4437 is the next reasonable level for a retest (.382 of entire bullish swing). This is the level is where I would like to see price stabilize and show reversal patterns for a possible swing trade opportunity. As long as price maintains this level, an attempt to retest the high would be within reason and worth taking the risk in my opinion (IF the market offers the opportunity).

The fact that price has gone up so quickly after working its way to the 5K level is a bearish sign because often this is when the majority of the "active" crowd is long. To be more specific, "majority of the active crowd" means the current population of investors who are trading in and out of this market regularly (which is a relatively small market) and when this crowd is mostly long, bullish momentum is likely to dry up. This is what I mean when I use the EXPRESSION "There is no one left to buy" which is not to be taken literally. The size of the candle on the larger time frames is what points to this condition.

People have been writing to me about being short, and this is a very tough market to outright short. One way to consider benefiting from a significant retrace would be to buy alt coins against BTC . In theory they should rise as BTC gets cheaper. This is an investment strategy which means buy and hold. I do not have any specific recommendations as far as which alt coins to choose, but I would say if you own alt coins, now would be a good time to add to your core positions since they will be cheap relative to BTC .

In summary, it will be interesting to see how investors behave after the forks are out of the way next week. As these markets mature, the coin relationships will change. Just like a month ago when BTC sold off, everything followed, and that relationship has slowly unwound, but that does not mean it won't come back. As traders we cannot expect anything (especially in these markets) to be fixed, or consistent when it comes to relationships. This is why technical analysis is so helpful because no matter what happens, price will still find support and resistance , it will still trend, and it will unfold in formations that offer some clues as to where price is more likely to go next. It is all a matter of evaluating new information and adjusting.

Comments and questions welcome.
Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| | Cofounder (S.C.)

hello, do share your comments on the latest price development. TIA.
Nice TA! Thanks for you time and sharing!!!

I would agree with most everything you have said here in this publication. My only "input" is if one gets involved with alt coins, I recommend getting in on ALT/USD pairs rather than ALT/BTC pairs IF POSSIBLE. I know some are not traded in USD . Bittrex probably has more ALT/USD pairs available to trade than most any other exchange. I prefer being in a better position to protect my USD capital. Hence, the recommendation.

Thanks again for sharing and All the Best!!!


thanks for the detailed analysis ... what are your thoughts at the moment ... do u think we will see BTC cross 6k , if yes to what levels? TIA
Too many people waiting analysis of BCH/USD pair from you , best regards .
Hi Mark

Appreciate your perspectives as always. If I am not mistaken, from your other posts you have a core holding in Bitcoin as an investor, correct? If so, do you look to take profits in these moments of market euphoria or rather keep a core holding separate from trades locked away for a pre determined time period?

Interested to get your perspective on investments vs trades. Thank you.
+1 Reply
How do you think the upcoming fork affects prices here? It would seem that people are stocking up on BTC in order to obtain bitcoin gold.
+4 Reply
Taking a page out of @MarcPMarkets playbook, after the convincing price break past $5100, it is looking like we are in a wave 3 or wave 5 (difficult to tell which) of a broader wave 1 temporary bull. The correction will inevitably come, but it may have to wait until after Oct. 25 when the Bitcoin Gold fork occurs. People seem to be racing to the Bitcoin party in the hopes of getting free Bitcoin Gold, thinking it's the next Bitcoin Cash (I don't think it is). With all the euphoria, this price movement could potentially yield a Bitcoin price target near $6k in the short term. So I've entered a short-term long order with TIGHT stops, giving an attractive risk/rewared ratio of 1:7, before the long-awaited correction commences.

After the gradual upward price creep, I was able to raise my stops to my entry price, and now the trade is risk-free. As the price increases further, I will continue to raise my stops.

Just to be clear, this is not a long order, but an attempt to ride a bit of the Euphoria wave before a necessary correction.

Thank-you Marc for the great lessons on risk management in many of your previous posts.

+4 Reply
d3ssy dalmazio
@dalmazio, Bitcoin Gold is moot point(less). 2x is where the real problem lies.
@d3ssy, Tell that to everyone who want's to hold Bitcoin before the fork, so they can get free Bitcoin Gold. The market doesn't lie.
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