For those who have bought, don’t be too happy just yet as the broke above the $7,900 resistance was only the first sign of seller’s exhaustion. What we really want to see is a retest of the $7,900 level (resistance now turned into support) to confirm the sellers cannot push the price down again, or, to see if a consolidation emerges at the current price level.
If you have not yet bought some Bitcoin around $7,000 (WHY DIDN”T YOU!?), there are a few scenarios that you could trade:
1. The easiest way, without confirmation (for aggressive trader) – buy the neckline & 0.382 fib pullback. Stop loss can either be $7230 or $6700 depending on your risk appetite.
2. (My favourite scenario) The price goes down to retest $7,900 and dip below $7,900 for a day or two, but the weekly candle manage to close back above $7,900 (retest completes). The dip is going to trap more bears and at the same time scare the bulls to close their long positions. Once the buy orders are thin on the order books, the big boys can easily push the price up.
3. Consolidation happening at the current price level that leads to a triangle/flag pattern. Once the price breaks above the consolidation pattern, you have a clear setup to enter your long positions and set the stop loss and targets.
4. There may be a weekly pattern (we don't predict, we plan and prepare a trade setup and react to it if the setup emerges). Buy on the breakout of the and set stop loss on the other side of the . Risk reward of 2 is easily achievable.
One small reminder, I see many of you had identified the primary trend using a higher timeframe but as soon as you start placing orders you completely forgot about your primary trend and only focus on your trading timeframe. Please always keep the primary trend in mind. If you have no idea what I am talking about, check my last education post about top-down analysis.
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Mid-term vision is still going nicely: (Click & play)
**This is for educational purpose only"