Bitcoin reversal? How to start entering long

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
After a long and brutal decline Bitcoin has shown a reversal on the 30m chart.
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 trendline break?
b) Or will we get a higher low and establish a working uptrend channel , 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 resistance level 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 downtrend channel .
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.

Comment: Apologies for the messed up picture. These callout boxes tend to move after the posting. Here is what it should look like:
Comment: Another mistake: In the beginning of the text I mentioned the 30m timeframe, I meant the 15m chart. The 15m chart is correct, I wanted to show the reversal in this timeframe.
Comment: BTC did break through the resistance around 7800 pretty quickly. As expected this was a trap for the shorts who did enter between 7800 and 7400.
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.
Great observations. Thank you for taking time to share about it.
I think right now 8500$ seem to be a similar trap... Markets not closing above to fool the long traders again
+1 Reply
FBlocktrader EspressoDopio
@EspressoDopio, thank you! Happy to hear that you liked my explanations.
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).
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