BTCUSD update: A move off the 17171 all time high to 13010 in two days. 5K move in two days is a demonstration of how much risk is involved when buying into this market at such levels. What is even more amazing is this retrace is within proportion of the current price action. In other words, this market is not bearish YET.
The nearest relevant support measured from the 5400 low is 12751 which is the .382 of the recent bullish structure. The 5K pullback just missed that level by about 400 points and is now showing a long wick on the current candle. This kind of price action is perfect for day trading long and short for those who have access to reasonable spreads and can short. The futures market should provide that flexibility for the rest of us. Is this market finally going to sell off like everyone keeps saying?
The answer is: it is too early to tell. The bearish price action that has appeared may seem dramatic, but it is within the proportion to the way this market is moving and has not even broken the first projected level of 13010. That is why I keep saying this market is for day traders because you take your profit based on targets on smaller time frames.
There are two levels to watch for as the market unfolds. The 13010 for a double bottom reversal which can lead to a long signal, and the 15580 to 16273 area (.618 of recent bearish swing) which can lead to a lower high and signal a sell off that can retest the 13k level or lower. There is no question that the market is generally strong, and that means there is a greater chance that the support level holds while the resistance level breaks.
I am not buying into this market at all. I prefer to wait for the futures to open tomorrow and next week and see how price action is affected before I take any position in this market. I am more interested in trading the futures than I am of the actual coin because of the flexibility. I am still a firm believer that the futures will bring balance to this market rather than dramatic new highs.
As far as shorts go, the current leg is the first sign of weakness. Weakness means there are more sellers than buyers within the current price action and is not to be confused with a trend reversal which takes a lot more time to develop. This is why shorting is more effective on shorter time frame strategies like day trading which are characterized by tighter stops AND targets. The less time you are in this market as a short, the better. If you are looking for shorts, wait for a reversal at the projected resistance level, that is where the reward/risk is the most attractive. And again, if you do not have a well defined plan then you should not trade at all.
A more serious correction can take this market back below the 8ks but there is NO structure in place that implies that YET. Remember TA offers clues in regard to what is likely to happen in the immediate future. The more time that is measured takes away from the reliability of the analysis because anything can happen. A piece of news can come out that takes the market by surprise which a chart cannot foresee. Often the market is in a position that news will push in a particular direction faster, so TA may not offer precision, but at least it provides a way to measure the risk and potential.
In summary, it will be interesting to see how the behavior of this market changes along side of the upcoming futures markets. There are many opinions but no one knows for sure, not even the people who are responsible for creating the futures contracts for the exchanges. This first leg of selling is normal and is still within the recent bullish structure. If this market is going to correct further, it is more likely to begin that process from a lower high, a double top or a double top variation which can start from a slightly higher high. Emotions are running rampant in this market, do not let yours control you, even a simple plan is better than nothing at all.
Doesn't it make more sense to develop a long-term investing strategy and stick to it, than to constantly try to time this market? No offense Marc, I have utmost respect for your analysis and expertise, but I've seen your posts since BTC $1800. It's up and up and up. With this market, just buy and hold. That is, trade the other kitty stuff, but leave BTC alone in your portfolio
Shakesbear
⋅
@Saylo, day trading is probably better than buy and hold at current price level.
Shockinalive
⋅
@Saylo, the essence of trading it is to gain more BTC and then hold it. Why would you only profit on long term when you can also profit at short term?
Saylo
⋅
@Shockinalive, couldn't help but notice you've been on here for a month. I think you'll see why soon enough. Traders get fleeced.
Shockinalive
⋅
@Saylo, who cares about being a month registered on a website, I'm out there for years on YouTube does that mean I'm also subscribed at YouTube and comment on everything up there? Your argument is quite invalid, don't get me wrong I know what point you are trying to make but if you checked BTC's history you know that it goes on with cycles and that every cycle ends up with a (relatively big) correction. I'm not saying that BTC won't go up again and break new all time highs, but to go up there we first need to go down (what comes up...). You might see it different, but that's why we have this beautiful platform (Tradingview) to discuss about the things we are thinking about, right? :) Cheers bud, good luck and hopefully we will see BTC mooning!
Saylo
⋅
@Shockinalive, Definitely did not mean any disrespect.
The probability of a deep correction is pretty high, but the long term trend is up. Too often traders miss trades entirely because the price bounces before their order is hit (or they're just thinking too much), and thus they're left on the sidelines.
Compare the profits of HODLers to traders in BTC, and I guarantee you the hodlers are ahead. Cheers to you as well. I could have sold at 8k and bought back in at 6k, but what if i missed it? If I did I would have missed the move to 19k. In the long term, hodlers are rewarded in this market. Trade the other stuff is all I'm saying. Best of luck, cheers!
Shockinalive
⋅
@Saylo, no problem man. Yes definitely agreed with you, 2018 should be an even better year for BTC. :) Cheers!
josephtse
⋅
@Saylo, Problem is, might not be a problem at all, but BTC has historically corrected 87% after major blow-off tops like the one we recently had this year. I mean...700 at beginning of the year to 17,000??? That spells crash all over it. Could it go to 25,000 or even 50,000? Sure, but that all but guarantees a 75% pullback. I lot of people will buy this dip at 12k here, which COULD be a good move and bitcoin could make one last final rally, but then what if it crashes after that back down to $5500? As long as people don't care about a 50 to 75% paper loss, then yes, continuing to buy on 30% plus dips is the best strategy in the long run,
pharoahscursed
⋅
hmm definite a good insight. But for me this looks like a correction for a last wave. (AT LEAST TO ME.)
B173
⋅
We are currently in correction leg four of the current Elliot wave cycle - leg five impulse is still to come. After the five subwaves of leg five are complete there will be a major retracement, fib retracement can be estimated once leg five is complete. That will be a larger retracement since it is based on all five impulse waves and their subwaves.