No one can guess the market with 100% accuracy. However, we can look at evidence and build probabilities and when a market does what you expect, you can use that to set up a trade.
I use price action, patterns, supply/demand, cycles and timing tools to look for market pivots. If my tools get me close then I'll make really profitable trades. If my tools are wrong, which they will be at times, I will get stopped out. That's trading.
When we were at $9900 we hit major resistance, had a major fib level AND it was day 29 of the bitcoin 30 day cycle. That gave me huge confidence in taking a big short position, which was very profitable.
However, when we pulled back at the .618 fib and started finding support, I thought there was a 50-50 chance we would go higher and wanted to be positioned. Despite having a generally bearish bias, I did not want to miss a 3rd wave up. I took a long because I liked the risk vs. reward. In this case, I got stopped out and took a small short position. I could have stayed short and been more profitable, but it went against my expectations that we would see a large down move at this stage in the bear market.
Bitcoin became severely oversold in the middle of a cycle and I've been waiting for the next set up to go long. I think we are getting close now. We are on day 28 of the 30 day cycle. We had a low on day 23 which would be an early cycle low but its possible, so I have to remain open. However, I expect a low is more likely in the next 5 days.
There are 2 things that I expect are most likely happen (not guaranteed by any chance):
1. We break this resistance at $7600. This would set up some open area to $8000 then $7600 would become support. If we stayed above $7600 for more than 3-4 days I would start to consider that day 23 was the low and I'd be looking to set up a short position. As I'm writing this we just broke a wedge, so don't think this will happen
2. We make a lower low in the next 1-5 days. This has a high probability of being a cycle low so we look for reversal signs to go long.
So over the next few days I really want to see sub $7000. I think that would flush out everyone and get rid of a lot of bulls. In my cycles updated, I noted that everyone is looking for June 6th low and the market usually doesn't give it away that easy so I think a low before then would make more sense. But we'll see.
I don't believe we'll go under $6500 but if we do break it we could get a strong spike lower as that would be major support so you can't just blindly buy any low. We'll look for reversal signals.
Can we just boom up? Absolutely. If we eventually can get over $8800 I would start looking for a bullish daily cycle. I would generally look for resistance to break then look to buy a pullback. Sometimes that is happens and thats just part of trading. You adjust expectations and form a new trading plan. I would rather see us go bullish as its easier to trade, I just don't think its as likely just yet.
So let's see what happens here. If the market comes close to my expectations then I'll have a chance at a good trade set up. If not, then I'll patiently wait until it provides me the right set up.
I use price action, patterns, supply/demand, cycles and timing tools to look for market pivots. If my tools get me close then I'll make really profitable trades. If my tools are wrong, which they will be at times, I will get stopped out. That's trading.
When we were at $9900 we hit major resistance, had a major fib level AND it was day 29 of the bitcoin 30 day cycle. That gave me huge confidence in taking a big short position, which was very profitable.
However, when we pulled back at the .618 fib and started finding support, I thought there was a 50-50 chance we would go higher and wanted to be positioned. Despite having a generally bearish bias, I did not want to miss a 3rd wave up. I took a long because I liked the risk vs. reward. In this case, I got stopped out and took a small short position. I could have stayed short and been more profitable, but it went against my expectations that we would see a large down move at this stage in the bear market.
Bitcoin became severely oversold in the middle of a cycle and I've been waiting for the next set up to go long. I think we are getting close now. We are on day 28 of the 30 day cycle. We had a low on day 23 which would be an early cycle low but its possible, so I have to remain open. However, I expect a low is more likely in the next 5 days.
There are 2 things that I expect are most likely happen (not guaranteed by any chance):
1. We break this resistance at $7600. This would set up some open area to $8000 then $7600 would become support. If we stayed above $7600 for more than 3-4 days I would start to consider that day 23 was the low and I'd be looking to set up a short position. As I'm writing this we just broke a wedge, so don't think this will happen
2. We make a lower low in the next 1-5 days. This has a high probability of being a cycle low so we look for reversal signs to go long.
So over the next few days I really want to see sub $7000. I think that would flush out everyone and get rid of a lot of bulls. In my cycles updated, I noted that everyone is looking for June 6th low and the market usually doesn't give it away that easy so I think a low before then would make more sense. But we'll see.
I don't believe we'll go under $6500 but if we do break it we could get a strong spike lower as that would be major support so you can't just blindly buy any low. We'll look for reversal signals.
Can we just boom up? Absolutely. If we eventually can get over $8800 I would start looking for a bullish daily cycle. I would generally look for resistance to break then look to buy a pullback. Sometimes that is happens and thats just part of trading. You adjust expectations and form a new trading plan. I would rather see us go bullish as its easier to trade, I just don't think its as likely just yet.
So let's see what happens here. If the market comes close to my expectations then I'll have a chance at a good trade set up. If not, then I'll patiently wait until it provides me the right set up.
