Double digit gains in 2 hours started the reversal (6100 to 6900).
While it is easy to see these short squeezes, ist hard to enter at the right places!
I want to show you how to start entering long in a possible reversal without FOMO (fear of missing out).
After prices hit 6900 and broke the downtrend, BTC moved down again in a short term trend channel.
Two big questions arise now:
a) Do we get a new low, which is often to be expected after a break?
b) Or will we get a higher low and establish a working , indicating a reversal?
In the chart I have marked with blue arrows the candles at which decision could be made regarding the two questions.
At these points you can enter long:
Long 1 +3:
Prices bounce up at important levels, indicating a valid uptrend line. Simultaneously the short term downtrends are broken. Both entries are a little more aggressive but have the biggest upside potential.
More details I described in the chart.
Long 2 +4:
Here we can already see prices moving up in a steep new uptrend.
Furthermore a second attempt to go down inside the trend failed, which is a failed second entry short.
This traps some shorts and leads to more buying pressure.
This is a little difficult to see on the 30m timeframe here, but if you look closely at the shape of the candles you can spot it.
On a lower time frame (15m) it would be easier to see.
What is happening right now?
Prices have reached the 7800 level, which is the and former breakout area. All shorts from the prior strong downtrend have now seen their breakeven stops (or trailing stops) hit.
Prices could not go higher an started a new .
Is this the end of the uptrend already?
No, at the time of writing BTC pushed higher, breaking the downtrend.
This could be a bear trap and we might see a new high. Prices above 8.000 would probably trigger a lot of stops from shorts.
The short term uptrend , which started at 7400, was fueled by traders who had to cover shorts and new longs buying the break above 7800.
Now a big second leg may take us close to 9000.
Right now we are in a range imho. So expect some traps ;) But we traded up into the range, so it is more likely to break out of it in the same direction (above 8500).