BTCe 4hr - Price rejection leads to potential bear resolutions

BTCE:BTCUSD   Bitcoin / U.S. Dollar
1237 8 17
Hello all,
I thought I would take some time to bring this community up to speed with my perception of BTCe's current price action and my expectations going forward. As regular readers of my blog and viewers of my videos will no doubt already know, I was on the verge of taking a long position in BTCe with a nice move through the $629.60 level. Of course, that move never came and I am basically still on the sideline. Interestingly though, that bias may have limited my 'profit exposure'. By not considering short setups I limited my participation. It always seems like the ones you let slip through your fingers are always the huge winners....doh!
Anyway, back to the story...recently, I posted on the site a study of last year's inverted head and shoulders and compared it to this year potential one. It suggested a test of BTC'e Daily OTE             (long) zone shouldn't be too unexpected. Additionally, I was left with a feeling that the current BTC             market feels very complacent and that a good shakeout felt a bit overdue. Couple that realization with my recent concerns about the daily price chart (see videos for more on that) and short ideas are starting to make more sense. So today, while looking at the chart I decided to lay a bearish ab=cd BoT setup study over the chart and see what kind of levels it produced. It was at that moment I realized I really had the wrong bias and short positions were already established and working towards their targets. What confirmed the idea for me was the fact that I repeatedly have mentioned recently that the triple top established just a few days ago would be 'the tell' for me and that it represented a brick wall of resistance. The next logical step (which I missed) was, why not short against it? As you can see, the BoT's Short entry level just so happens to be that exact! Considering reward to risk is 3:1 I would be more than happy to take this bet all day long, even if the odds are only 50/50. I am unfortunately not in this trade, should we rally back up to the original short entry level and produce a selling candle setup, I will consider it...
The levels are fairly well explained on the chart but if you would like to learn more about how I trade and the various models I run, please feel free to either contact me here at TradingView, follow me on Twitter @CRInvestor or drop by our Bitcoin             themed website

Thanks again all and I hope my levels, setups and areas of interest of are benefit,
+1 Reply
do we have some more leg down to go? like 570-560? or the drop is over? is the bearish BoT still operational?
CRInvestor BitcoinGuru
Bearish BoT's target has been hit. Profits should have been taken on the setup and at the very worst you still have a little 'free' portion of the short position on (with stops at break even) to play any further move lower. For range traders, one could argue long from OTE ss tag (578.97). You would be risking to the bottom of the range (545.50) and an ultimate goal of the top of the range being tested (654.38). But for me, I think its a bit early for me to consider the next trade. One should be very happy with booking a 3:1 r/r profit and sit back and watch the fireworks for the time being....
BitcoinGuru CRInvestor
ok thanks. well at the stage we are now their is still not enough demand unless that buying volume changes drastically over the next few hours. We had a lot of chances of going bullish but did not, so that's a good sign for me not to buy in right now for the short-term. So I am still bearish for the short-term. 645-554 being a possibility of being retested. If I see some descent volume then I will buy in again at 610.
MoonTrader CRInvestor
Agreed. I made a nice short from 608 to 592 on Finex and had to hold myself back from making more trades. I still have a pretty bullish outlook because it seems to have found support earlier than expected, and we finally have some volume.
Fantastic, Brian. I too was mostly bought above $600 (~$605 average) with only a few small short positions accumulated around 620... The thing that appealed to me about being long was that the support was more well defined and therefore allowed a tighter stop to be placed. 600 was quite an obvious structural and psychological barrier for BTC-e for several weeks, I had no problems being "that guy" that set an automatic market-sell stop when $600 fell. It got me out this morning and started a running profit take which triggered at $580 with a small portion of the total position size. I've tried to illustrate 2 equivalent 3:1 R/R trades of being long and short from the sideways range we were locked in to below. These were pretty close to exactly the levels I used, I just rounded to make the R/R identical.

I think ultimately, the bullish consolidation off the entire $400 -> $670 move left a lot of longs that were late to the party stranded in a dead market with piling swap costs. That's why the bullish BoT failed in slow motion. These next few candles will be an interesting test for the willpower of the bulls more than the bears. If we see a cascade of flip-flopping, structural levels in the mid 500's could be broken down with relative ease. Barring that, I think this ship is ready to hold water and sail.

Edit: cleaner chart
You really nailed it!
+3 Reply
Insightful as always!
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