MarcPMarkets

BTCUSD: Slow To Go. Retest Of 7Ks Before Next Run?

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
BTCUSD update: Bearish momentum may still be in play because of the slow 8427 breakout attempt. Watch for a bearish close or break of previous candle low for more clarity. This does not mean I am bearish , I am observing and interpreting price action as the market unfolds.

Many inexperienced traders who read my reports often think my evaluation is also a reflection of my trading decisions which is not the case at all. The market may show signs of short term bearishness, but that is the market, and only serves as a consideration for strategy and risk management. If I was day trading these markets, then I would be much more sensitive to immediate fluctuations. I am building a position trade which means I am looking at the market from a much broader perspective.

I often remind newer traders that before you evaluate a market, you must have an idea of what time horizon you want to trade because information is weighted differently for each time frame. For my position trade, I am looking at broader market structures and evaluating price action on larger time frame charts such as 12 Hour, daily and weekly.

And at the moment, price action has gotten stuck just under an important resistance point. A decisive break of 8427 is a key indicator for the return of bullish momentum on the bigger picture. It acts as a confirmation that the most recent bearish swing is over. So what does it mean if the level doesn't break? It means bearish possibilities are more likely.

What bearish possibilities? A pull back to the 7Ks for a possible higher low formation. or a retest of the 6K low. In fact, the lower boundary of the current support zone 8171 to 4983 (.618 area of entire bullish structure) implies that a test of the 5Ks is possible for a failed low scenario.

How do you manage a bullish position IF a bearish move unfolds? For me, I will not add any more to my long. Only in an extreme instance if price spikes off of a slight lower low will I consider buying more. Otherwise, risk can be managed by staying flat and waiting for more bullish signals. Once again, what to avoid on this time frame is getting short, because chances of a fake out are high based on the location of this price action.

In summary, having a perspective serves as a guide. Risk management and strategy must be shaped and adjusted as the perspective changes. Your perspective must start from a time horizon and that is what should determine how your information is weighted. This is what allows me to be long and not get shaken in a market that has been bearish on the short term. Short term direction changes frequently, but the bigger picture does not. The fact that this market is trading within a major support zone is a key factor in my perspective and I am not about to become bearish at a low. As the market offers information that is in line with MY outlook, I can take initiative like add to my position. On the other hand, if the market offers information not inline with my outlook, I have to take defensive measures like not adding, possibly lightening up, and waiting. In order for this to work, my outlook must be based on a fundamental premise and in this case it is about the economic role of this market in the future. This is a major difference from day trading, which does not consider long term viability and focuses only on signals at the moment. Do not confuse perspectives. The simplest thing you can do is choose one and learn what is relevant to that time horizon and what is not. That alone will put you on a much more stable path when it comes to strategy and decision making in these markets.

Questions and comments welcome.
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Comments

Thanks Marc.

Can some people like my post, I would like to join the chat, appreciate it :)
+5 Reply
I agree with you BTC should test first 7500 or 7200 before brake the 8500 than fall to 6000
+3 Reply
Marc your analysis are my go to. I feel the same way in the short term which is why I liquidated everything. If I see a lower high I imagine we move to 7500 which to me is an important swing point if we double bottom....correct me if I am wrong. In an effort to get cheaper coins I am also concerned about the bull move considering we are lingering at 8200. Also in an effort to not buy high where would you reenter? Initially, my emotions said if it passes 8400 I would buy there. Then I would be that buy at the top trader. 8500 and 8600 have good resistance and a fail at all those points is possible for a good looking head and shoulders on the 1 hr. or this could be a nice W formation with a higher low and this is going to move up. Needless to say I believe we are right at the point in which the bulls or bears win this is the tug of war at the moment. It is my belief in just a few days away we move up due to futures...we move opposite to the last move up. To be a total 'noob' I am going to say we are at 10K on the 16th. So if this is the case I am greedy and want cheaper coins :)
+2 Reply
stell_s1 mycoinmoon
@mycoinmoon, Sometimes when I feel mixed about long or short, I may stay in position (don't sell) but hedge the situation with opposite margin call usually near resistance point.

For example if i have 1 BTC in long position, then we reach resistance point and eventually we go down for a while. I open short margin call for percentage of my position typically 50-60%. This will reduce the risk while the situation is clearer. Also will keep your funds at near the resistance zone if keeps going down.
Reply
Until USDT is in the game, the scenario is only bulish! If something happens with it, which is doubtful, since the US government does not care at all, it might go bearish. But USDT is in play, so only run up, backed by Binance and Bitfinex.
+1 Reply
EduardoCantelli KISStheProfit
@KISStheProfit, usdt 2bi, marketcap 200x 2bi
Reply
KISStheProfit EduardoCantelli
@EduardoCantelli, Well, check now when binance is again IN! Two billion in this unregulated world can make 100 Billion Marketcap. When I see what is going on now, I think I am right. Binance was out, and the price was low. Binance is In, price up. They do not have fiat!
Reply
whoisthelorax KISStheProfit
@KISStheProfit,

not true.

while binance was out, btc price drifted upwards. get your facts straight.
Reply
whoisthelorax KISStheProfit
@KISStheProfit,

USDT was in the game this entire 70% drop...
Reply
KISStheProfit whoisthelorax
@whoisthelorax, Probably people were just taking their profits out, what do you think?
Reply
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