BTCUSD Update: Double top appears at 5865 level which signals a more significant retrace is coming and in this report I am going to highlight which levels I will be watching for bullish reversal patterns that can lead to a retest of the high.
Besides the price formation (which is very clear) the other factor that is pointing to a more significant retrace is the 1.618 extension at 5742 (this measurement is projected from the 4153 swing low). These levels are far from precise, but usually offer a reliable level for profit targets, and once reached, the market is also more likely to turn. This is why I do not buy highs, especially near these extensions.
On the bigger picture it is clear that this market is strong, but the question is where do you buy the pullback for a swing trade? I am anticipating the 4820 to 4520 support zone (.618 of recent bullish swing). There is a number of overlapping levels in this area and allow for clear definition of risk according to my plan. The 4820 upper level of the zone is also the .382 of the entire bullish swing, and on top of that 4895 is the previous resistance level that was holding price below the 5k level which can now act as a psychological support near 5k. The entire zone is 300 points wide which means I will need some bullish formations before I can determine an actual level to measure risk from, but at least I know that 4520 offers a good starting point. If price breaks below this zone, that will signal more significant weakness and I will reevaluate from there.
There is a minor support at 5234 which is the .382 of the recent bullish swing, but since it is relative to the recent swing, I would rather watch for a break below this level as a signal for the 4820 area retest. Minor bounces off this level can offer some attractive day trading opportunities if you are employing strategies on the smaller time frames.
In summary, we are now entering the week of the forks and will see if the usual "buy the rumor, sell the news" tendency plays out. Since the other coins like ETH and LTC are following this price action to an extent, the levels can serve as a reference point for reversals in the other coins as well (especially on a day trading time frame). I get a lot of criticism for not posting exact trades, but that is not the purpose of my analysis. If a condition fits my swing trade plan, then I will write about it, and if I do not like the price action based on MY criteria, I will write about that too, but that does not mean you have to follow it exactly. Your own risk tolerance, account size, investment goals, trading plan and style are all major factors that should shape how you make decisions, but ultimately the decisions you make have to be from your OWN ideas. The purpose of my analysis is to offer a perspective, or a context that you can use for comparison and as a starting point to develop your own ideas from.
@goldbug1, hehe great. Glad you find my analysis helpful.
Turobej
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Thank you again! You guys @MarcPMarkets, @SEAN_VENGAN, @goldbug1, @DianKemala and some others are helping a lot of people realize trading is not and shouldn’t be like buying chips in the casino and I am highly gratefull for all your advices/writing. Hat down to all of you!
Sir, good analysis. But I think it is important that there will be a free btc gold, which was the principal reason for this hurrah at the beginning. So it is beyond buy rumor sell news.. Investors have a strong incentive not to sell.
Big players dumping to spread fear. this is the most logical explanation. Otherwise, how can so many sellers could have sell-off at the same time in such a coordinated way. It is dumped hundreds of dollars merely in fifteen minutes or so. This could only happen when a group of whales dump together to trigger stop-losses of others.
lapoochi
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@asdfghghj, From my limited experience I do believe you are correct about big whales dumping but you have to remember when whales dump that triggers fish to panic sell (I've done this several times myself) which drives the price down even quicker until finding a support. I for one could give a crap about the free bit coin gold that still isn't even a guaranteed thing... For my bank roll I'd only get a small amount anyways that prob isn't going to be worth anything near what people are expecting. Though I really don't think the bitcoin gold is what drove the price up. It's part of it but what drove the price up is prob what drove the price back down... Whales buying... I mean volume doesn't go from nothing to full speed in a 1 minute time span because people want free coin... It's because the fish are riding the wave next to the whales. And the free coin is just a side benefit at the end of it all. Price doesn't make big moves unless big buyers or sellers are moving it... I'd rather not base whether I'm holding bitcoin at the time of the fork or not based on the free coin though. I'd rather have my capital free to make good trades.
@asdfghghj, you are searching for logic in a irrational market. Price is what it is, I do not care why, I care more about where.
whdals1019
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I greatly appreciate your insightful analysis. Although it's a small amount, but I am constantly profiting based on yours and my own analysis. People may criticize you for not posting your trades, however, I highly encourage you to keep posting your analysis. It helps me a lot on making my own prediction for how market will shift. So Thank you! Keep up with good work!