But not so fast...the market had some tricks up its sleeve to scare you out of your long position or to make you believe we are going back to 6000 again.
How to avoid getting tricked and profit from all this?
So after the first leg up and the break of the uptrend, price action rules did give a target of 9000 (second leg).
We eventually did get to that level, but not without a lot of seemingly erratic up and down, trapping traders to the wrong side.
One of the keys to trading is to determine if we are in a trend or in a range!
When the second leg did not reach its target and prices went below the it is time to think about a possible range.
This range, which was established at the Entry 1 (blue arrow), is pointing upwards, so we have a large trend channel.
Always try to find these slightly tilted channels, do not look only for horizontal ranges between support and resistance!
You can see prices moved exactly in this channel for several days.
Nice short and long entries could be found at the upper and lower side of this channel:
- second entry long from the low at 7550
- Range expected
- for more details see my posting "No free lunch!" in the related ideas
- now this looks like a perfect bulltrap at the top of the channel
- failed breakout above 8500 resistance
- we did see two equal length legs up inside the channel reaching the upper side
- expect a second leg down to the lower channel line
- second entry short after it turned down at resistance
- breakeven stops of traders who got short at entry 2 were taken out
- little bear trap at the lower side of the channel
- second try to go higher around 7800 (second entry long)
- two legs down completed
- another try to move up counted from the low at entry 4 (second entry long)
- channel was confirmed again
- expect to go to the upper side of the channel, making an new high
- we had a strong short term trend up, the break and several legs up
- bull trap at the top of the channel (breakout above 9000)
- now the second big leg to 9000 is completed, i talked about in the beginning!
- perfect second entry short after the break of the steep downmove
- two small legs back to the (two pushes up)
- breakeven stops from shorts below 7850 taken out
- another red leg down expected to the lower side of the channel
The end of the big reversal in Bitcoin?
No, we are still moving inside the channel.
But right now a lot of people might see this channel...and when everybody does expect something to hold often the channel is broken.
So pay attention to the short-term which is still in play.
I would not be surprised if we see 8200- 7900 again. Why? There might be still some breakeven stops from the longs at entries 4 +5 ;)