Retail trading emotions and a Bitcoin bearish reversal?
Good morning, traders. It is finally Friday and we have made it through the week in spite of the calls for market drops of $3000+ due to what is currently nothing more than a potential corrective wave. Bitcoin dominance continues to grow, presently sitting at over 48%. This increase has always been a precursor to a bull run. My previous two possible bullish scenarios remain viable as price action continues to play out. If we are still bullish, then price is either completing subwave 4 of the larger wave 1 (could potentially drop just a bit lower if it does not continue up from here) or it is completing the larger wave 2. If we are not, then we won't know more realistically until the $6800 demand zone is breached. So what does this mean for retail traders? It means they shouldn't be emotionally calling for a bearish reversal at this time. Doing so belies logic and as we know emotional trading will cost you money. This doesn't mean price won't push lower, just that retail traders should be trading logically and not emotionally.
If you have been following our live streams (TV won't allow me to advertise where it is, but I have no doubt that you can find it easily) then you know that price action has been nudged to its present location and, in doing so, many multi-million dollar bids were filled overnight. You also know that we were expecting upward movement overnight as indicators became oversold and potential bullish divergence built. There is massive support in the $7200 range as visible on TensorCharts.com and clear skies above which means price currently has little resistance above it. The wave 2 scenario is the 6H chart on the left while the subwave 4 scenario is the 1H chart on the right. (UPDATE: A large ask has been set at $7500 just now, so be wary if currently trading this area.)
My expectation is for price to follow the blue outline if it continues higher. This blue line is not an expected wave count or timeline, rather it's just a description of the general movement I expect to see. If price follows this pattern, then it will complete and IHS with a target in the mid-$8100s. Remember, in order to be a valid IHS, we would need to see price spread increasing and volume expanding as price completes the right should and breaches the neckline. As price reaches the top of the DBW that it has been in, we will have to take a look at price action and volume to get a better understanding of its direction. Continuing beyond the IHS target is an indication we are then completing subwave 5 of the larger wave 1, while a breakdown in that area suggests we are completing the larger wave 2 which would require price to retrace one more time before heading upward beyond $9000 to complete the larger wave 3.
The only thing a trader controls is how much they lose, so they should be spending much more time perfecting their risk management than anything else. Unfortunately, this is usually the last thing retail traders spend any time on at all, and that's why most end up losing their money quick, fast, and in a hurry. The casino mindset will wreck your capital every time.
If you have been following our live streams (TV won't allow me to advertise where it is, but I have no doubt that you can find it easily) then you know that price action has been nudged to its present location and, in doing so, many multi-million dollar bids were filled overnight. You also know that we were expecting upward movement overnight as indicators became oversold and potential bullish divergence built. There is massive support in the $7200 range as visible on TensorCharts.com and clear skies above which means price currently has little resistance above it. The wave 2 scenario is the 6H chart on the left while the subwave 4 scenario is the 1H chart on the right. (UPDATE: A large ask has been set at $7500 just now, so be wary if currently trading this area.)
My expectation is for price to follow the blue outline if it continues higher. This blue line is not an expected wave count or timeline, rather it's just a description of the general movement I expect to see. If price follows this pattern, then it will complete and IHS with a target in the mid-$8100s. Remember, in order to be a valid IHS, we would need to see price spread increasing and volume expanding as price completes the right should and breaches the neckline. As price reaches the top of the DBW that it has been in, we will have to take a look at price action and volume to get a better understanding of its direction. Continuing beyond the IHS target is an indication we are then completing subwave 5 of the larger wave 1, while a breakdown in that area suggests we are completing the larger wave 2 which would require price to retrace one more time before heading upward beyond $9000 to complete the larger wave 3.
The only thing a trader controls is how much they lose, so they should be spending much more time perfecting their risk management than anything else. Unfortunately, this is usually the last thing retail traders spend any time on at all, and that's why most end up losing their money quick, fast, and in a hurry. The casino mindset will wreck your capital every time.
