Jumping off from this mornings chart we were sitting around $6450 and I was leaning bearish and looking for a break today or by tomorrow. I was personally staying all cash after exiting my most recent trade in the $6500's and waiting until we saw confirmation with further lower lows on 4 hour or for the bulls to start breaking the upper resistances in the $6500s.
So why were we expecting the bears to take control?
As stated in this mornings post, we had a double bottom at $6411 and $6413 but watching the BTCUSDSHORTS chart showed them increasing and BTC had fallen under the 4 Hour EMAs (without the bulls immediately buying the dip) for the first time since 9/12 when this bull bounce started. This had me leaning more towards the bears that they were about to take control. And shortly after this morning post, the bears started to run.
From two days ago, I was also waiting for confirmation the daily lower high was set at $6580 and we now have that confirmation with today's bear break. The bear flag drawn out on the daily was still a bit extended but left it up to show the break through rather than a bounce at the bottom. A bounce up towards low $6300's and rejection back down may occur but at this time I am personally continuing to expect lower lows once RSIs cool off some.
We have a lot of recent lows from 4 hour chart to be watching including $6208 from today, then $6191, $6177, and finally our low from when the bounce first started on this move at $6116. I would not be surprised to see all 4 of those levels get taken out together as many in positions will utilize those areas as stop losses and odds of us cascading down and straight through them is fairly high in my opinion if RSIs are able to cool off first. Remember, it's much easier to see the big flushes down with RSI's cooled off and not something like we have now where 4 hour RSI is already down at 30 (much harder for bears to see the follow through downward).
4 Hour is oversold here and did have me bottom fishing for a bounce opportunity earlier today so scaled into positions in the $6260s and just under and when the bounce never went much over $6300's, it had me exiting at break even. So back to all cash for myself and will remain patient. If we see some sideways action or slight upward action to just bear flag out over the next 24-48 hours, these RSI's will cool off again and allow the bears to dump price again. Weekly chart (not pictured here) continues to point bearish as the bulls were unable to give a significant bounce attempt and are now right back near the lows.
Be patient, look for the low risk entries (such as earlier, I was entering and initially had my SL's set in the $6116-6191 range of prior supports for low risk to my capital. Once the bounce was failing to show any bull strength, I was happy to exit at break even and patiently wait again for another potential entry.
