BTCUSD Short Opportunity (Bitfinex)

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
Bitcoin             is pulling back from the impulsive move up to 316. While I am bullish on Bitcoin             in the long run, the pull back is not yet complete and the price is currently in a counter-trend correction (i.e. counter to the current down-trend, in the direction of the larger bullish trend ).

Two possible approaches to trade the pull back:

  • Consider selling the Coin on a retest of 300 around the .5 fib (above the .618 fib) or
  • consider selling on a break of the green trendline into the sub 289 region

for a first target of 269 - 272 (1.27 fib extension) and a second target of 257 - 260 (1.618 fib extension).

As far as stop loss levels are concerned, I am always very careful when it comes to Bitcoin             . Due to market illiquidity some violent spikes do occur occasionally that can easily take you out of an otherwise profitable trade.

If you manage to get in at around 300 (or slightly below) I would consider a SL at around 306 - 308 to be relatively safe. This still gives you a decent RR ratio of 3 to 4, depending on your target.

If you get in at the breakout, a SL slightly above 295 should be more or less safe. In this case I would definitively aim for the second target though, as the RR ratio (1.6 - 2) for the first target does not justify the trade imho.

I'm still dubious on shorting now, the time was when you first published ! Even though you couldn't reach the targets
I agree. Going short right now is probably not ideal, but neither is going long. (I would need to see a clear break of 282 before re-considering a long position.)

Personally, I opened short after the breakout, closed half of it near the spike down to the 1.27 fib, and set the SL to break-even for the other half. Now I am just waiting patiently for either my targets to be hit or the remainder of my position to be closed at (or near) BE.
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