This should be the biggest indicator to any trader in any asset. When lots of people open lots of shorts they are anticipating a large price decline. I would not be surprised to see bitcoin back down to the $4000 area. Will see you down there.
This is a friendly reminder from TheCryptALPHA to trade safe and smart.
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I'm curious why you think everyone piling into the same trade is a sign that prices should continue in that direction? In my experience this has normally been a sign of a trend being close to over. Personally I'm in cash here, because all of my technical signals are saying lower, but everyone being short makes me think there's going to be a rush to cover at some point in the near future. The only thing that perhaps changes my mind about this is the longs are at significantly high levels as well... So maybe we need to first pop the longs then we'll pop the shorts lol
TheCryptAlpha
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@bwy, THe best way to succeed in trading is to do the same thing everyone else is doing. Don't try to be smart. You wont outsmart the vast majority of people. Just a helpful tip. If shorts are opening this may not be anywhere close to the bottom.
dcardona1
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@TheCryptAlpha, getting into overbought territory for shorts. Typically 2 days after reaching overbought, BTC makes large move to downside.
TheCryptAlpha
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@dcardona1, I'm not concerned and honestly, If we get higher prices, I'll just add to my shorting position. I'm almost certain that $8,500 is unobtainable at this given moment. And that is where I would start closing shorts. But that is not happening. I've been short since $8,000area
dcardona1
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@TheCryptAlpha, I agree that we'll continue to go down for the time being however, there may be a potential quick opportunity trade for a long position since BTCSHORTS are overbought and broke out of rising wedge pattern. I'm thnking open long position at $5900-$6000 for a retracement trade.. What do you think?
TheCryptAlpha
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@dcardona1, I'll be looking for large entries @ anything below 6k as I think its great. Trick is to buy on the way up not the way down. :) Good luck see you at $5,900
TheCryptAlpha
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@dcardona1, I would not trade against the trend so close to a double bottom. As a trader you need an edge, the market can break down and slide at any given moment. And the odds of your long trade is far worse than my short. Even with everyone shorting you don't want to go against trend. There are rules in life, don't go against your against your wife and don't go against a trend, especially so close to a breakdown point. It's like swimming up a white water rapid. You may be right for a short period of time but eventually you'll lose
dcardona1
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@TheCryptAlpha, I agree on trading against the trend but don't you think a lot of people are looking at 6k as a double bottom? Plus the shorts being overbought and BTC being oversold..
dcardona1
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@TheCryptAlpha Also - at $5900, market cap for BTC would be 100B. This is a psychological number and could be a good reversal point.