MarcPMarkets

BTCUSD: Fear At Lows Same As Greed At Highs. Stick To Plan.

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
BTCUSD update: New low of 6K reached as these markets go into the Senate hearings today. From a technical perspective, price is in the middle of the largest support zone of this market without any supportive structure in sight. In this report I will review what this market has to show in order to confirm stability and more importantly how to manage emotions during extreme conditions.

The 8171 to 4983 is the largest magnitude .618 support zone for this market. This is also the area that offers the greatest probability as far as a general market reversal is concerned, the question is how do you position yourself for it?

With the kind of momentum that is driving price, the best thing to do in my opinion is to wait for larger formations to unfold over time before continuing to build longer time horizon positions.

Often, the first leg of a major reversal is extremely sharp , which needs to be followed by a shallow pullback and then break of a previous peak. In other instances, this market has been forming the attempt at a reversal, but no previous peaks have been taken out.

Buying into lows like the kind apparent at the moment offers great prices, but as you can see the risk is usually high so this type of positioning is aggressive. While waiting for a solid reversal formation over time will require a ton of patience. Patience means watching price spike higher quickly and then waiting a number of days for it to prove that it has found strength by retracing to a higher low, then going higher and taking out a previous resistance. A key level to watch to help confirm that momentum has changed to bullish on the short term, is a close above 8427 which is the .382 resistance of the current bearish swing. That level serves as the target for the initial reversal swing.

I look to incorporate both situations into my strategy which means there is pain involved. I do not mind being aggressive as long as I temper that buying with careful sizing. The worst thing you can do at this point is flip and become a bear in an area where price has a greater chance of reversing. This is a buy or stay out type of situation, it all depends on how much you are willing to risk.

In summary, all strategy aside, the most important thing you can do in a situation like this is stay focused and follow your plan. If you have lost a lot more than you imagined, the best thing you can do is turn that loss into a lesson and gain experience from it, otherwise it is a complete loss. Trading is not a game of matching wits, intelligence or "being right", it is a game of controlling risk. Losing, no matter how uncomfortable it is, is just as much a part of the game as winning and we either embrace it and turn it into experience, or we can give up and let it win. Being fearful at lows is no different than being euphoric at highs. Just like I wrote back in December, markets do not move in a straight line and the same applies here as well. Extreme conditions offer opportunities for those willing to accept the risk.

Questions and comments welcome.
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Comments

Great article, thanks for sharing.

I enjoyed every single bit of it and learned a lot from this incredibly talented Trading View member. Thanks again for sharing this information.
+15 Reply
Wise words Marc! I think most successful traders all have one thing in common. They embrace their losses.
+14 Reply
Thanks for the videos. As the market recalibrates I believe there will several 'false' alarms, as buyers try to anticipate/pre-empt when we've reached "the bottom". I also believe the ascent will not be as fast & furious as many predict, and will be certainly not be parabolic like the previous ascent, with many wary investors selling the rallies trying to recover previous losses. Much more confidence in the whole blockchain/crypto ecosystem needs to be restored before strong bullish sentiment returns, and this may take a long time to pan out.
+5 Reply
mycoinmoon elikay770
@elikay770, I'm not sure about this. if you held to this point are you selling at say 10K....im not and I bought at 12, 10, 7 and 6.6.
Reply
elikay770 mycoinmoon
@mycoinmoon, the way things are currently looking, you did well to buy in at 7 and 6.6!!! Based on current price action, I also seem to be proven wrong with my comments about the ascent not being as fast and furious as many predicted!
Reply
I know that this is not best trading advise but "Go buy, close your computer and check the price in 1 week from now". And i am sure you won't be disappointed.
...Just watch how good news will start coming in next weeks! Everybody needs them so they will come!
+4 Reply
Wolfgang34 stell_s1
@stell_s1, I think you are right. I think more negative news will come, but it has already been priced in. Once we get past the senate hearings today things should ease up. I also think we will see positive news in the form of some big whales announcing long positions.
+1 Reply
If you haven't read through the notes already of the senate hearing. The guest speakers basically want to regulate ICOS to protect consumers.
+3 Reply
BRRD jiber
@jiber, as I thought would happen they make a clear distinction between cryptocurrencies and ICOs. Good to see that there is understanding there.
+2 Reply
thank you for taking your time to be as polite and informative as you are. very professional and wise.
+2 Reply
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