MarcPMarkets

BTCUSD: Watching For Buyers At 9280 Support?

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
BTCUSD: Bearish momentum is in play now that the previous bullish trend line and 10754 support have been broken with conviction. This bearish scenario is still limited by the structure that this market is within which offers two specific levels to watch for a reversal.

This kind of move scares people which is good for others who want to buy at better prices. In my previous report I wrote about possible strength hidden near the double top . I did not write that this market was strong.In fact I wrote about letting the market show its hand, and that this bearish scenario was possible IF the market broke below 10754. Letting the market prove itself costs money, because it means you have to give it room to breath. If you are the type of trader that can't afford to let the market breath, or playing too close to the vest, you are going to have a much tougher time participating in the favorable market moves as well.

Now that we have a scared crowd, the question is where are they going to get shaken out, in other words, where are the extremely prices relative to the current structure in place? The double top that is now confirmed is a bearish formation, and it implies further weakness UNTIL another signal or formation negates it. The first step to anticipating this type of price action is to first locate where it is most likely to happen. 9280 is the swing low that has potential to attract buyers. As I write this, price is moving toward this level without much hesitation, but remember this large bearish candle still has plenty of time to close. It is the close that matters more than where price is intra candle.

The second level to watch is the 8659 extreme support boundary. Anywhere between the 9280 low and this extreme level is where new selling enters the market (break out traders) and where scared money often gets shaken out. This is the high probability reversal area, where I want to be prepared for a reversal signal to add to my long position.

In summary, even though the immediate momentum is bearish , that does not mean the long term outlook has changed. The broad double top is in play, until it gets cancelled out. Minor sell offs like the one occurring at the moment are normal and healthy, no matter what the hype-sters are saying. As long as the broader outlook and premise are still intact, bearish activtiy such as this is more likely to lead to a lower risk buying opportunity, which will not be so obvious on a chart. Can the market collapse altogether? Sure, anything can happen, but I am willing to bet that prices will be higher in the long run. Part of positioning yourself for a broader move is to know where the prices are with the greatest likelihood of reversal, from there is it a matter of waiting for the market to prove itself, and once it can, you have to be able to take the risk in an environment of imperfect information.

Questions and comments welcome.
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Comments

this support range is very weak :) must fail
+1 Reply
BRRD tungha1
@tungha1, until today I felt otherwise but I'm agreeing now.

I've closed all longs in profit.

In cash now looking for another major leg down to around $4000 within several weeks.
Reply
Hopefully the SEC can reign in bad industry players who are destroying crypto like Coinbase
+1 Reply
A nice effect of this drop was to send shorter hourly timeframes (6, 4 and 2) that had recently reached overbought on RSI into oversold.

12hr and longer haven't been overbought since the end of last year.
+1 Reply
little confused about taking profit.
initially your purchases showed losses of as much as 50%, so why would you sell to yield a single digit percentage profit? Because the risk/ reward in that case is very asymmetric. like selling options to gain small amounts until you are wiped out by the big one.
I'm not being critical - just don't get why you'd risk so much to gain so little
Thanks
+1 Reply
Binance announced that they localized the affected accounts and those transactions will be reversed!

https://twitter.com/cz_binance/status/971476396278099969

I am not sure if this can stop the selling pressure but at least explains the sudden sink!
+1 Reply
The fundamental reasons for this dump are suspect. It looks like concerted weak news to shake people out before a new bull cycle.
+1 Reply
Stef_Gee moo111
@moo111, SEC says crypto exchanges must register with agency
Reply
moo111 Stef_Gee
@Stef_Gee, https://www.sec.gov/news/public-statement/enforcement-tm-statement-potentially-unlawful-online-platforms-trading

For digital assets seen securities only ? That's why major exchanges avoid security tokens.
Reply
Aamir66 moo111
@moo111, or tell tale signs of even a bigger fall to come.. ?
Reply
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