Bitcoin being a volatile asset, I have always found my best trading to be looking at the big picture and not sweating the small stuff. Try to identify the trend as quickly as possible, and trade accordingly. As a trader I will look at EMA's, Fib levels, chart patterns, and all the analysis here and on social media to try to add it all up and get my mind in the right direction.
In my previous post I talked about the current chart pattern being near identical to the run up to $20k, with a clear topping level, and... though my analysis proved to be accurate directionally, I generally painted a zone I was expecting based on the movement as the top was not confirmed.
The big difference (and benefit to all of us traders) between the run up to $20k and the run up to $14k? Now, because we are in corrective territory, we can look at fib retracements and provide ourselves more context than we could when we have a true blue sky breakout (all time highs) not knowing where BTC is going to top out at.
We know we ran up to and slightly past the .618/$14k from the blue sky $20k breakout. Why past? To hit stops both on the 'stop buy' and 'stop loss' for shorts, flush them out the best we can to clear the way down. This much has been proven to be clear now, even if we reverse and move past $14k.
But what does the analysis tell us now?
Well, clearly the .618 was important. And if the .618 was important going up, what can we identify for going the other direction, down? I did a fib retracement from both the $20k and $14k levels to see if we can get any confluence. After all, all the algo's and bots running the markets these days, though set up differently, will look for the next key level, up or down. Over and over again, and on repeat.
And I can only say we point to a classic fib confluence. Anytime we have a run up, retrace to the .618, we will always have the .618 from the lower high ($14k) and the .236 from the all time high ($20k) showing confluence. A target, if you will. The target, noted with the arrow, is roughly $7k.
What will this mean for strategy? Well, there will be bounces on the way, despite things looking like an anvil being thrown off a cliff today. But I strongly believe we will hit $7k, just a matter of how. And, what about lower than $7k? More than likely, just like we went past the .618, I expect to swipe down below the .236. I will buy at these levels knowing that if this is not the floor, I will expect to at minimum see a robust bounce. How I buy and how much I buy will all depend on the patterns, EMA's, and other factors when we get there. So no reason to bother sitting around planning out too much. But is it possible we go to $3k, $2k, $0? Possible, always is. But this confluence gives me a healthy first target to feel good about buying again.
As for now, big picture, this looks like where we are headed.
In my previous post I talked about the current chart pattern being near identical to the run up to $20k, with a clear topping level, and... though my analysis proved to be accurate directionally, I generally painted a zone I was expecting based on the movement as the top was not confirmed.
The big difference (and benefit to all of us traders) between the run up to $20k and the run up to $14k? Now, because we are in corrective territory, we can look at fib retracements and provide ourselves more context than we could when we have a true blue sky breakout (all time highs) not knowing where BTC is going to top out at.
We know we ran up to and slightly past the .618/$14k from the blue sky $20k breakout. Why past? To hit stops both on the 'stop buy' and 'stop loss' for shorts, flush them out the best we can to clear the way down. This much has been proven to be clear now, even if we reverse and move past $14k.
But what does the analysis tell us now?
Well, clearly the .618 was important. And if the .618 was important going up, what can we identify for going the other direction, down? I did a fib retracement from both the $20k and $14k levels to see if we can get any confluence. After all, all the algo's and bots running the markets these days, though set up differently, will look for the next key level, up or down. Over and over again, and on repeat.
And I can only say we point to a classic fib confluence. Anytime we have a run up, retrace to the .618, we will always have the .618 from the lower high ($14k) and the .236 from the all time high ($20k) showing confluence. A target, if you will. The target, noted with the arrow, is roughly $7k.
What will this mean for strategy? Well, there will be bounces on the way, despite things looking like an anvil being thrown off a cliff today. But I strongly believe we will hit $7k, just a matter of how. And, what about lower than $7k? More than likely, just like we went past the .618, I expect to swipe down below the .236. I will buy at these levels knowing that if this is not the floor, I will expect to at minimum see a robust bounce. How I buy and how much I buy will all depend on the patterns, EMA's, and other factors when we get there. So no reason to bother sitting around planning out too much. But is it possible we go to $3k, $2k, $0? Possible, always is. But this confluence gives me a healthy first target to feel good about buying again.
As for now, big picture, this looks like where we are headed.