On this channel, we love calling triple bearish divergences. This is one of the best ways to have conviction on shorting something. So if one pops up in BTC, can we be bullish? Well that question is better answered when you also include time horizon. In the short term, the trade is that BTC is becoming overbought on the 3D and the 1D. So that would put a time horizon somewhere between 3 and 9 days for a pullback. Let’s have a look.
Now the key thing to note here is that BTC is bullish trend. This is a short term move. We are seeing a situation where BTC is tired, and may need to take a break. That’s all! We have broken 14K so that is out of the way and the bull market can march on. But if we even close even marginally negative today, BTC puts in a triple bearish divergence. These are not to be taken lightly. People always talk about death crosses in crypto, but let’s face it, the move has already happened if you are trading off of that information. A triple bearish divergence let’s you be ahead of the crowd. So when you see one, you take notice. You also take action and short. Now this doesn’t mean you sell all your crypto and put the whole whack on a margin short… that would be irresponsible. But you raise cash. Hell you can stake that cash and make money doing that. You don’t even need to have a position open!
In this blog, we consider ourselves full crypto cycle investors. With the amount of tools that we can use now, including staking stable coins (sort of like a bond), XAUT (which synthetically mirrors the price of gold and gives you commodity exposure), shorts (which add alpha if you are correct), there are many things you can do other than just be long. So think about it! Manage some risk and realize there are many ways to make money.
buy or sell using leverage you get rekt,
just buy lower and sell high
derzzycharts
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@muxie, I agree. Leverage is dangerous. But I don't have a problem trying to generate some alpha on a short. Sizing is important here though. If you want to short, maybe the most you would short with for a single position is 3% of your portfolio.