Bitcoin: Short Squeeze Has Yet To Begin BUT Don't Chase!

Bitcoin beginning to show some positive follow through, BUT the short squeeze has yet to begin. We recently mentioned the 11,850 area needs to be cleared, which is what we just saw. Now price needs to close above this area which will prove the buying is credible. If Bitcoin can close out this candle strong, a short squeeze through the low 12K's is likely to unfold.

I shared a long entry price on here almost two weeks ago at 11750, and we also shared another long signal privately during the previous week which became ACTIVE on Sunday at 11,655. Our targets are reasonably distributed between the low 12Ks and the low 13Ks. Our risk at this point is defined by the 11K support area.

The mistake you do not want to make now is to chase. Many will come out and cheer lead, and say things like Bitcoin is going to 14K! Don't miss it! The reality is, if you are not in this move from lower prices, you are now facing a much higher risk, ESPECIALLY if Bitcoin can't clear the 12,300 resistance zone boundary. It might run, but that is not the point, the point is the RISK. If you chase on a regular basis, over time, any profit you manage to make will be given back as a result of taking too many low probability trades that carry high risk. You will not be consistent by winning a few hundred points, here and there while losing 1K points when wrong.

Comment:

Our swing trade was stopped out at 10,950 but hey that's how this game works. Stop save money in the long run, and I had to learn that lesson the hard way more than once. As I wrote in my previous analysis, IF 11K was taken out, the 10,500 area would be the next key support in play. It got there pretty quick, thanks to the stock market.

Could we have steered clear of this trade? We knew the 11,600 to 12,300 resistance zone was problematic, so why did we take the trade anyway? The reason: the broader structure since the March low is CLEARLY bullish and that has not changed. This thing needs to take out the 8500 area in order for us to change our outlook. So what to do now?

We have reached the first criteria of our swing trade strategy, and that is attractive location or inflection point. Now we need to see a setup that allows us to clearly measure reward/risk, and once that appear, we will be able to share a new swing trade LONG idea. The 10,500 area is the old resistance/ new support based on the previous consolidation formation.

Keep in mind we do not day trade or short this market. There are many who have no sense of magnitude or time frame think a trade is a trade, but that is not true. Each category of trade carries it's own magnitude of RISK. We do not pretend to have some kind of guaranteed system or high win rate strategy, what we specialize in is how to manage RISK. Yes I know it is not what most want to hear, but that is why most are not able to show consistent results over time.