Bitcoin: The Next Leg Higher?

Bitcoin retraces off of the 67K high but I thought "it was just getting started!". Isn't that what "everyone" was saying a week ago? The herd is usually wrong especially at market tops and bottoms. I stick to my rules and one of them is: I don't buy highs. And the higher it goes without me, the less interested I become. NOW as price starts testing supports I am much more interested. In this article I will briefly describe the scenarios I am WAITING for over the coming week.

Before I get into the support levels and long scenarios, it is important to note: if you look at a weekly chart, there is a 3 leg structure in place. These are typically corrective structures, which means Bitcoin can very likely NOT be in a strong bullish trend but instead part of a broad consolidation (Wave 4's can be very tricky this way). IF price action proves this idea to be true, then Bitcoin can reasonably test the high 40s to low 50K area. ALWAYS evaluate RISK first.

First support: the 57 to 60K area is a minor support level where a buy signal can appear. IF price can produce a reversal pattern (mini double bottom, pin bar etc), and it confirms, it is worth a try because the recent momentum is still generally bullish. If it can stay intact, a retest of the mid to high 60's is within reason and should offer at LEAST 1:1 reward/risk.

Second support: the 50 to 53K area is a much more notable support because the 48 to 50K area was a significant resistance. This area would not only offer a better reward/risk, but also a greater probability since it would be reversing in a location that is much more attractive to larger time frame strategies like position trades (this means a larger population of longs).

Besides these scenarios on the swing trade time frame, there is NOTHING to do but WAIT. Yes there is lots of opportunity on smaller time frames, but if you lack experience, you will only lose in the long run. If you got caught in the sell off from 67K, you have to ask yourself, WHAT motivated you to take such a high risk position?

There is NO room for conventional wisdom or logic in a highly random environment such as a financial market. This is especially true for smaller time frames. Often when a market looks its best, the RISK is the highest. In order to come out ahead, you NEED to be able to process information in a more objective way while embracing the REALITY of the irrational forces that drive price. If this is confusing, begin with learning how to view the market from a contrarian perspective and learn to bet against the herd, not be part of it. It works so well that casinos and forex brokers have built their entire business models around the concept.

Thank you for considering my analysis and perspective. I hope you find it helpful.