MarcPMarkets

Bitcoin: Rejection Is Fast.

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
The 41K resistance level has been taken out, but has not been cleared. It is possible that Bitcoin is still stuck within the 41K to 30K consolidation. The question is: do we get momentum follow through?

Often when price rejects a support or resistance level , it unfolds quickly. Bitcoin lingered around the high 30s, tried to pullback, only to be followed by an engulfing candle. This is a clear sign of strength which we have to assign greater weight UNTIL price proves otherwise.

The bullish scenario: next couple of candles are inside bars or dojis. The indecisiveness around a significant resistance level can culminate into a momentum continuation pattern. If the 42K area is cleared, the next key resistance is around 50K. Bitcoin is NOT out of the broader Wave 4 consolidation which means many false starts and false breakouts are HIGHLY likely in contrast to a full out bullish trend . Do NOT be suckered into over exaggerated claims "100K BTC" etc.

Risk on the swing trade time frame can be defined from the 35K level. If longs are taken in anticipation of the momentum follow through, keep in mind R:R is realistic around 1:1 or slightly higher from current levels. This is not the best location for a new swing trade. Better for lower expectation day trades.

The bearish scenario: price rejects the 41K area over the NEXT candle. Like I said, rejection should occur relatively quickly. If you are open to shorting (We ARE NOT), this would be a more appropriate location (compared to 30K). The thing is the stop must be no higher than 43K for swing trades. A decisive close above 42K and price can move much higher. If the bearish rejection unfolds, 35K is a reasonable profit area, NOT 30K. Bitcoin is NOT in a broader bearish trend . so expectations on the bear side should be very conservative.

Avoid getting stuck in an opinion, and do NOT get mixed up by the opinions of others. If you don't have a clear strategy or plan, you can only win randomly. Focus on defining your plan and keep it as simple as possible. In this game, it is more effective to make decisions with LESS information. LESS IS MORE.

Thank you for considering my perspective and analysis. I hope you find it helpful.
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Comments

After 10 days of pushing from 29k to 42k. 35-38k is totally normal. I highly doubted it will drop below 38k before the next leg up. imho.
+18 Reply
@STPAUL007, I agree!
+2 Reply
watchtrend STPAUL007
@STPAUL007, Good work, i expect 36K trend possible
Reply
from what i see, most people think BTC is going up - is that a bearish indicator?
+10 Reply
AlexTest3 simplejoe1
@simplejoe1, if most people prepared for BTC to go up, then it will decently will go down to get all the longs terminated from 40k.
Reply
simplejoe1 AlexTest3
@AlexTest3, do you mean to say that the market makers/exchanges will make it go down in order to liquidate the longs?
Reply
AlexTest3 simplejoe1
@simplejoe1, Off course, it's all pump and dump :)
+1 Reply
simplejoe1 AlexTest3
@AlexTest3, ok thanks. good to know
Reply
simplejoe1 AlexTest3
@AlexTest3, bitcoin is the greatest pump scam in history. not backed by anything whatsoever yet selling for $38k!
+1 Reply
"If the 42K area is cleared, the next key resistance is around 50K": sure, who cares about the 200 DMA at 44k anyway, it's just one of the most significant moving averages in this market, from inception...
+9 Reply