Bitcoin (BTC/XBT) Daily Long&Short Trade Setups 2021/02/23
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Market Overview
Market Structure
As a result of the huge selloff yesterday, some are questioning if the bull market has ended. I will propose three potential scenarios and my opinion on the likelihood of each:
1. The bull market is over(10%): The bull market is over and we are going to correct 60-80%+.
2. The correction will continue(30%): Bitcoin will have a larger correction like the one it had from $42K to $29K, and the projected bottom of this correction is ~$40K.
3. The correction is over(60%): Bitcoin has reached the bottom of this correction at $47.6K and will either consolidate for a period of time or bounce up from here.
In the chart on the left, I show scenario 2 where we have another correction of ~30%. Looking back at the 2017 bull run, we had 5-6 corrections of 30-40%, and while history doesn't repeat, it often rhymes, and I expect this bull run to have multiple corrections before finally reaching a parabolic top. This is one of the reasons why I currently believe that the bull market is not over, and thus I am currently not touching my hodl portfolio.
Trade Setups
Below are the potential trade setups that I would be interested in trading:
Long Trade Setup #1: False Breakdown
1. Price Action: Price breaks below the then rapidly climbs above $47.6K, forming a bear trap
2. Trade Entry Confirmations: A breakdown candlestick followed by a reclaiming candlestick, above average volume on both breakdown candle and reclaiming candle, MACD bottoming
Short Trade Setup #1: Retest and Continuation (200MAs)
1. Price Action: Price needs to move back up to the 200MAs, currently projected to be @ $54.5-55.5K by the time price reaches it, and bounce back down.
2. Trade Entry Confirmations: Bearish candlestick pattern, above average volume, MACD topping out
My Recent Trades
About Me
Why Follow Me
DISCLAIMER: I am NOT a financial advisor and this post is NOT financial/investment/trading advice. I will not be responsible for any actions you take based on the analysis and comments that I provide. I am simply sharing what I am doing, and is not meant to be investment or trading advice. What you choose to do with the information that I provide is your own sole responsibility! The cryptocurrency market is extremely volatile, and you WILL lose all your money if you are inexperienced! DO NOT risk any money that you cannot afford to lose and always be cautious and manage your risk!
Please support me by liking and following, and sharing your ideas and analysis in the comments! Thanks!
If you like this post, please support me by clicking the like and follow buttons. Also feel free to share your thoughts and analysis in the comments below!
And don’t forget to check out my daily analysis on Bitcoin, Ethereum, and Altcoins!
Market Overview
- Price Action: Bitcoin, as well as the overall cryptocurrency market, experience huge volatility and sell-off yesterday, causing widespread market panic. In today's post, in addition to our regular daily trade setups, I want to touch on the overall trend and market structure.
- Patterns: N/A
- Areas of Interest: The area(s) of interest for me are the 200MAs @ $54.5-55.5K and the lows @ $47.6K. Once price reaches one of these areas, I will monitor for entry confirmations. If the entry confirmations are aligned, I will take a trade and share the my trade in real time.
Market Structure
As a result of the huge selloff yesterday, some are questioning if the bull market has ended. I will propose three potential scenarios and my opinion on the likelihood of each:
1. The bull market is over(10%): The bull market is over and we are going to correct 60-80%+.
2. The correction will continue(30%): Bitcoin will have a larger correction like the one it had from $42K to $29K, and the projected bottom of this correction is ~$40K.
3. The correction is over(60%): Bitcoin has reached the bottom of this correction at $47.6K and will either consolidate for a period of time or bounce up from here.
In the chart on the left, I show scenario 2 where we have another correction of ~30%. Looking back at the 2017 bull run, we had 5-6 corrections of 30-40%, and while history doesn't repeat, it often rhymes, and I expect this bull run to have multiple corrections before finally reaching a parabolic top. This is one of the reasons why I currently believe that the bull market is not over, and thus I am currently not touching my hodl portfolio.
Trade Setups
Below are the potential trade setups that I would be interested in trading:
Long Trade Setup #1: False Breakdown
1. Price Action: Price breaks below the then rapidly climbs above $47.6K, forming a bear trap
2. Trade Entry Confirmations: A breakdown candlestick followed by a reclaiming candlestick, above average volume on both breakdown candle and reclaiming candle, MACD bottoming
Short Trade Setup #1: Retest and Continuation (200MAs)
1. Price Action: Price needs to move back up to the 200MAs, currently projected to be @ $54.5-55.5K by the time price reaches it, and bounce back down.
2. Trade Entry Confirmations: Bearish candlestick pattern, above average volume, MACD topping out
My Recent Trades
- 2021/ 02/012:I had a losing trade. I entered into a long @ $47,810, SL @ $46,647, and trade hit stop loss.
- 2021/ 02/04: I had a winning trade! I entered long @ $$36,819.0, SL @ $$36,528.0, price reached a high of $37,783.8, giving a risk reward ratio of 3.3:1.
- 2021/ 01 /31: I had a winning trade! I entered long @ $33654 SL @ $33292, price reached a high of $34220, giving a risk reward ratio of 1.6:1.
About Me
- I started trading in 2008, first got introduced to bitcoin in 2009, and have been actively trading cryptocurrencies since 2016.
- I have worked on Wall Street trading bonds, stocks, and options.
- I have taken hundreds of live trades, each recorded with over 50 data points, all meticulously analyzed, using data analysis and modeling to optimize win probability and risk reward.
Why Follow Me
- Daily analysis on the latest market movements and price zones for high probability trade setups.
- Sharing of live trades that I take.
- A great place to help each other, learn from each other, and grow together.
- Trading education including a comprehensive cryptocurrency trading eBook, personal advice, and other educational materials
- Constantly testing and adding new trading strategies and refining battle-tested ones.
DISCLAIMER: I am NOT a financial advisor and this post is NOT financial/investment/trading advice. I will not be responsible for any actions you take based on the analysis and comments that I provide. I am simply sharing what I am doing, and is not meant to be investment or trading advice. What you choose to do with the information that I provide is your own sole responsibility! The cryptocurrency market is extremely volatile, and you WILL lose all your money if you are inexperienced! DO NOT risk any money that you cannot afford to lose and always be cautious and manage your risk!
Please support me by liking and following, and sharing your ideas and analysis in the comments! Thanks!
