Two days ago, price action was telling that buyers were likely drying up, so we took a trim on our long term inventory to prepare for a pullback, but also to remove risk from the market. This is our second trim, and we are now sitting on a pretty decent cash position ready to position back into the market.
There was no MA, oscillator, or indicator that was telling of the sell, but price action was showing signs of buyer exhaustion on multiple time frames so we decided to trim.
Long term we are still , there is still some room to run here, the market is not over euphoric, many were sitting patiently waiting to get in from lower levels, missed the run and are likely looking to jump in at some point. In short not everyone is long the market, no real signs of being overly euphoric, but there is interest. This is why I lean towards another leg up.
As mentioned in my last article, we were looking for 32k to hold, and right now the testing that level. A close below 32k and the next candle taking out the low of the current, expecting a pullback into the 24-27k area. This is where I am essentially looking for longs, but we may not go that low.
IF we find support here along with a setup to go long, am looking for a swing trade back into the 36-38k area initially, potentially to retest the high. Of course there is no setup yet, the market has not proven itself, so all we can do is wait.
So while many are guessing the next direction, relying on oscillators, indicators and Fibb levels that are meaningless, we are looking for verification of direction, via order flow through price action. Yes boring I know, chart art is so much more convincing. The beautiful colors, the symmetry and patterns, there is nothing more beautiful than chart art, but chart art is not indicative of what is going on in the markets.
In the end, sellers are in control here, but only in the short term. The question is do buyers attempt to take back control, and are enough weak hands bled from the market? Well that we do not know yet, so we will just remain patient and let price action provide some indication.
So it is ok to browse the chart art that is so prevalent from amateurs that think it is as easy as click and go, but do not get sucked in by the beauty.
By the way still buying every day with the Bitcoin challenge.