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Be careful with trading bitcoin in this local downtrend!

Short
BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Drop below 9500 has activated bearish scenario of a triangle from previous idea, so now we can expect more downside moves.

8500 and 7250 levels are also 0.5 and 0.382 fib levels from December's bottom of market, so we can expect this local downtrend will finish at this levels. Anyway there is 80% chance that bitcoin will stop falling in 7200-7400 zone because dayly 200ma will support price here.

What do we want to see to confirm this local downtrend is over? First is a good reversal pattern, second is strong break of 200ma on 4h timeframe.




Okay above was some stupid TA that was telling us that correction should start at 6000 level but bitcoin price was going higher and higher, TA is the reason why there were billions of shorts liquidated. Whales and FOMO/FUD are main things that decide where price will go.

Now think. Previous correction has finished at 7500 level, should we expect current one to finish lower? Big doubts about it. According to TA previous correction was should finish at 6400 or at least at 6800, but it has already finished at 7500. And at 7500 level previous correction created triple bottom, price was should break 7500 level at 3rd try but great manipulation happened and price pumped after 3rd touch of 7500. Should we expect manipulations like that to happen again? Of course, big chances for that. We also should remember that bitcoin is still in very strong bullrun.
So in my tg channel I will be carefull with posting signals to short.

Also one of main reasons why price is going down is US government attack against Libra and crypto at all. If situation around Libra changes, correction can probably finish.

And of course this downtrend is just a local downtrend because of Libra news and because bitcoin was pumped 300% from December's bottom. Targets of this bullrun are above 30000, all explanation you can find in my "Why I bought bitcoins at 3000" idea.



Note: this idea is just a guideline for day trading in my tg channel, the most possible price action for upcoming days in my opinion. Of course I need a lot of confirmations to enter trade and post a signal in tg channel.
Comment: If you like this idea please don't forget to put a like and subscribe to profile to be alerted about idea updates in time:)
Comment: So far 9000 was interesting level for buyers. But this retracement to 9900 looks like just a correction before another drop. Price will probably try to test 9000 level again, in case of a break price has all chances to reach first crucial level that I mentioned in the beginning of idea - 8500

Comment: Price tried to follow black line, but that last small upward retracement in blue circle makes everything weird.

In autumn/winter when we had strong bearish trend it was easy to trade things like this, in same situations price was just dropping to the dips in 10 minutes. But with current strong bullish trend its whole different story, price dropped 300$ and suddenly found support where some big buys happened, bulls just went wild and stopped price here.

Now everything can happen. Even though there were all possible signs for a drop, still during this bullrun we already saw few times things like this turned bullish eventually. Price can go for some sideways and then go up some more to 10200. Or still can drop.

Thats why this idea has this name, always be careful with shorts during this strong bullrun.

Anyway in my tg channel we already did some profit during that drop, maybe we will gain more if price drops, but probably other part of position will hit breakeven.

Comment: Thats what I was talking about in the beginning of idea. Some strong manipulative pump out of nowhere, price didnt even touched 9000 low again, stopped 300$ above it.

Always be careful with shorts during this strong bullrun. Always be prepared for manipulations like this. Always remember correction can stop much higher than it should.

If dayly candle closes above 10000 this can mean local downtrend is over. A strong break of 200ma on 4h timeframe can mean the same.

Comment: Since yesterdays pump was a clear manipulation, its still not clear where the price will go. Bulls need to hold green zone of 10000 to keep price bullish and so far they did but they should also bring price back above 10500.
If price drops below green zone, whole yesterdays pump will be just another bull trap and we can expect continuation of local downtrend

Comment: So price has completed red line from previous update perfectly and we have successfully traded this move in my tg channel.

Now we can say at least there was no bull trap and price is stable on this levels even after that great manipulative pump.

Still price needs to break red zone of 11000, without it a bearish scenario can happen again. We should remember 11000 was a hard resistance for the price, and we had 2 bull traps on this levels last few days.

On the chart we can see price has formed 2 patterns, a triangle and an inversive head and sholders. Both patterns can help price to break 11000 level finally, something like pink line. If triangle breaks to downside this can ruin all bullish momentum and push price below 10000.

Comment: Price tried to complete pink line from previous update and we have traded this move successfully in my tg channel.

But those patterns from last update were should push price through 11000 resistance, and price was should stay above this level, turning this resistance into support. Price failed to do that and now staying right below this crucial resistance of 11000 which is bad for bullish outcome. Now previous level of 10800 turns into support and if price drops below it we can think of shorts again. We had 2 bull traps right below 11000 last few days and pump from 9400 was a clear manipulation as well. So we shouldnt be surprised if price drops again from here.
To confirm bullish outcome price should break 11000 confidently and stay on this level as on support.

So we are waiting for a breakout of some of this levels.

Comment: So price has did another attempt to break 11000 in blue circle, and this attempt failed pretty fast and turned all this push to 11000 into yet another bull trap.

As I said in last update we shouldnt be surprised about it, just whales having fun creating 3rd bull trap at this levels in last few days.

Now price has broken 10800 level and green zone as well, and created head and sholders which will be activated if price drops below 10500.

Trade closed: target reached: Since previous update head and shoulders didnt dump price well enough. Price unexpectedly found strong support at 10324 and created bear trap here.

In my tg channel that short was hard and brought only little profit, while our next long after bear trap was easy. So that was another example of what you can read in the title of this idea: be careful with shorting this strong bullrun

Probably that bear trap is the local low and price wont go for another dump. Think its time to close this idea and create new one.

I will post new idea soon.

Comment: New idea:

Comments

Again very precise and accurate explanation and analysis, happy to be a part of your tg group. When the market conditions are not good, better not trade, after all quality is more than quantity :) We all looking forward to the next Bitmex signal in tg group soon.
+2 Reply
@Bigie82, my thoughts exactly ! Keep it UP Mr free signals :)
+1 Reply
asdasadsadsadsda Harry_Seldon
@Harry_Seldon, I will do my best:)
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@Bigie82, :)
Reply
Kool_Keith Bigie82
@Bigie82, fake account 4
Reply
Here is my take
+1 Reply
asdasadsadsadsda Butcher_of_Bitmex
@Butcher_of_Bitmex, ok I liked/followed ur idea, hope you will do the same with mine:)
Reply
Thank you
+1 Reply
@erdrone, :)
Reply
Nice analysis.. keep doing it !
Cheer up
+1 Reply
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