BITCOIN: Don't CHASE! Wait For The Retrace. 21K Support?

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
On Wednesday December 9th we sent out a swing trade idea with a buy stop at 18,680. On Saturday the same week, the order was reached and the trade was in play (along with a stop and 3 profit targets). All three profit targets were reached during the following week, with the third one being 23,680. People who received the trade had 3 DAYS notice to place the orders. Talk about being prepared in advance! The average profit 2K+ points.

Recently, someone asked me if it was now "safe" to buy Bitcoin . I will try to answer this in the simplest way possible: NO. For one , Bitcoin and the alts are still HIGHLY speculative instruments, these are NOT stocks, and most the them (the alts) offer NOTHING of real value, only big ideas.

So When To Buy?

Bitcoin is still flirting at all time highs. This is a highly vulnerable location, and only good for those who are in from much lower prices. The best thing to do at these levels (if you have not done so yet) is reduce risk by locking some profit in. It could be 10 to 20% of your position, doesn't have to be the whole thing.

Bitcoin is likely to retrace off the 24K resistance area , even though there are no specific sell signals at the moment. Should we short it? NO. From the beginning we have stated that we don't short Bitcoin , maybe now you can better understand why.

The 21,150 area is a minor proportional support relative to the broader trend. This is one place to anticipate buying activity for a new swing trade.

IF it is cleared, the 19,500 area is the next support which is much more attractive since it was a previous resistance area . (Likely many shorts happy to cover for break even here).

Beyond that, (a more extreme scenario) 18,500 is the next major support to anticipate bullish activity and reversal patterns.

We do not day trade Bitcoin , or consider time frames lower than an 8 hour chart. You cannot mix risk and reward across time frames and expect to produce a consistent performance.

For the month of December, there have only been 3 trade setups based on our swing trade strategy. ONLY 3. We participated in ONE . And now we WAIT for the next one which can take days or weeks. Our record for the year is very consistent, and we missed all 5 trades in November. LESSON: Positive performance is generated by PATIENCE and RULES that isolate high probability setups.

Focus on patience, which is a function of psychology, NOT charts or oscillators.

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20k pls
+4 Reply
Great read Marc and I really like your patience.

I do feel a retest coming, but always now my concerns are the institutional buying powers and a new stimulus package forthcoming driving BTC higher.
+4 Reply
@MA213, The overvaluations will be set right whether the institutional investors caused them or someone else. What shoots up must come down.
+2 Reply
@ReallyMe, Doesn't look like it wants to do that right now , lol. Although it will come down for Elliot Wave 4 at some point.
Always a great read, Marc, thank you :)
+4 Reply
PeterGersi Kennyk2
@Kennyk2 I am agree!
+3 Reply
Well said! Thanks for sharing! :)
+3 Reply
great analysis
BTC/USD in Rising Wedge {Hidden Divergence}
+1 Reply
Always love your TA and mindset bro!
+1 Reply
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