This was one of several signals that the market was positioned to reverse. As both Gillian and Marc pointed out with their BTC trades on the other site there were additional signals that a reversal was likely at these lower levels. Looking around there were other coins that were also showing the same signals and we started adding. We never expected that the market would rally like it did, but we have been warning for weeks that it was likely and possible. We had to exercise patience, and wait for opportunity, and when the risk reward was right we took the opportunity. This is now three positive trades under our belt which has significantly reduced the two trades we still hold from the 13.5k-ish levels. Keep in mind we had two successful trades and one neutral trade prior to those since 19k and several going into the final rally. I point this out because its about BASE HITS not home runs! Many gains by short were recently wiped out and then some. We do not have to be right all the time, and what is more important then being right is money and trade management!
So can this momentum continue or is it simply a bull trap? Here are the levels we are looking at to determine this.
The market is consolidating after the swing. The 7835 level is a minor but enough of a pullback that we could resume higher from here. We have overlapping levels between 7829 and 7844. But we do not want to pull the trigger yet. The 7165 to 7575 zone provides the best opportunity for a swing trade out of a higher probability reversal zone. Critical support comes at the 6872 level which a break down of this level would increase the probability that this is was a bull trap. The 8255 level is the of wave 1 and where we find minor resistance. First Major resistance is found at the 8474 level or the 0.382 of the broader correction.
The best trade right now is "NO TRADE". Let the market decide and provide guidance not try and guess where we may go. The levels we are looking for an additional trade is the 7165 to 7575 zone. Keep in mind many traders are stubborn and their desire to be "right" will have them shorting here. This is exactly what we want! Another chance to buy lower or enter a swing trade off their arrogance. The market is always right, and when you accept this, exercise patience, and look for opportunities in lieu of forcing trades, you will greatly increase your gains. Take the emotions out of it.
We must also keep in mind that though the trend in the short and long term are now both , in the mid term we are still . I can not emphasize to new traders and investors enough that you MUST be patient. Like my baseball coach said, "BE PATIENT SON AND WAIT FOR YOUR PITCH". Here's your sign!
Cheers for the analysis and great new website btw!
If I'm on the daily chart, using Bitfinex open/closing prices, the top (8357) and bottom (6620) are pretty evident. This gives the 0.618 Fib to be 7274.
If however I use the intra-day highs and lows for the fib levels, I have a slightly different result and also need to choose either the intra-day low of April 6th, or perhaps the intra-day low of April 1st (which was lower still). From your apr 16th update above, you've chosen the 12hr chart. Compared to the daily chart, this would be equivalent to mixing the lowest daily close (Apr 6th, 6500) and highest intra-day high (Apr 15th, 8459) to get your 0.618 feb at 7316.
If you could give a bit more explanation on your reasoning it would really help! I imagine the answer is that you need to pay attention to both timeframes, and to all these levels. Nevertheless, which is std practice, and which gives the higher probability level for a rebound is clearly important to understand. Many thanks!
I just read an article which basically says a bullish momentum is expected after the "Tax Day", which is 4/17. What is your opinion on that? It means a lot to me.
Thanks and regards,