Over the past few days I've seen chart after chart jumping on the bull wagon. The latest impulse move got them riled up. "We've broken above major resistance... check out this ..... to da mooooooooonn!!!!"
Then BTC hits the resistance and reverses right off of it... not surprising considering the whole point of charting resistance zones / reversal points is for traders to sell when they hit them. Also not surprising is that the they're referencing doesn't usually head into a significant resistance so it's really a useless comparison.
Then their updates echoed by the comments: BTC is so manipulated! Whales something or other. Tether is a scam (ok, that one has merit ).
But whale / market manipulation? Really? A beginner who reads the first chapter of any charting book will learn how to draw a . Is it that unfathomable that BTC reversed off of the longest down that's been in play since 2017?
People who don't understand charting / will make excuses as to why they think it's a bunch of baloney. Good for them (and better for us). Trading without guidance is just gambling and the vast majority of people who don't use TA will be victims of the market. On the other hand, those who learn charting and use it because it provides rules and structures to trade off of. Those who understand it will identify buy/sell zones and execute in concert.
As a general rule traders sell at resistance and buy at support. That said, when price retests the most significant resistance for the last 3 years (arguably in the history of BTC ) it's not that surprising to see a reversal.
Tradingview really nails their "top" authors picks. After all, likes and comments are the most important thing on the internet these days and who cares about actually getting proof of the assets "top" authors are trading and periodically verifying to see if they actually trade what they post. No, no... it's much better to have authors who won't commit to anything, beating their chest about how they're always right because they posted 5 charts this week and in all of them they straddled so the only thing they were right about was the market moving either up or down. Be sure to like their idea and buy their signal service though LOL!
Right now on the front page there's not a single "top" author who has this as part of their analysis. The most important in BTC's history nowhere to be found. That should tell you about the quality of the charts/ideas that make it to the front page. I just checked again. Not one. Be better Tradingview.
I've been saying for weeks now that BTC has been sending mixed signals and it's best to wait and see what it decides to do next. There are arguments that can be made for BTC to move higher and arguments for it to move lower. That said I'd like to talk about the latest pump that created a bullish engulfing candle.
I watched that live and in less than 20 minutes BTC pumped 3% wiping away the prior day's losses. The overall volume, however, is suspect and does not substantiate the move in my eyes. To me, it feels like the classic bull trap right below a key resistance designed to lure inexperienced and undisciplined traders. Not only did the subsequent candles suppress movement at the top of the pump, price is currently trending down. Recent pumps have done so with higher volume and ultimate returned to prior levels (even below). I believe price may float here for a while, perhaps even make a move higher to retest the major down trend resistance line (the only line on the entire chart for this idea) but ultimately BTC will drop. In the unlikely event it breaks through traders will buy the breakout, myself included. Until that happens prudent traders will wait patiently and take advantage of the higher probability setups to come.
I meant to post this yesterday when it happened but got sidetracked. First off, I've been preaching a cash position despite all the "top" authors making their bullish arguments. One line matters and it's on my chart. No one should be bullish until price clears and confirms above that resistance. Secondly, if someone's stupid enough to gamble and got in the market, when they saw bears smack down a rally like that it's better to be safe than sorry and get out! Anyone who bought after that selloff deserves to bleed.
BTC is approaching some key supports comprised of a minor triangle baseline and the daily 50MA. Despite this, I'm not buying. Why? When price is this close to the head of the triangle this is when violent, major moves can happen (so violent that stop losses aren't fulfilled) in either direction and currently the trend is down. Moreover, too many people jumped right back on the alt train with some pumping double digits and this would be an ideal opportunity to trap all those sheep chasing those gains. Lastly, this is exactly what a dead cat bounce is: price drops steeply, appears to show strength on the recovery (BTC's 4hr candles showed 3 white soldiers) then it does a U turn and crashes through a strong support.
The number 1 rule of trading is to protect your capital. Doing so means passing on an otherwise strong technical area because the larger structure shows great risk. This is the type of discipline that separates the professional traders from the rest. In chess the pawns go first. I need to see BTC decisively break out of that triangle in order to be able to formulate any high probability setup because right now BTC isn't giving me that.
Still waiting in cash. BTC started the dead cat bounce then it suddenly reversed for literally no good technical reason and since then it's been dropping below the 50MA every day while closing above it. Normally a series of pins bars closing above support is a sign of upward movement however the overall price is declining as is the volume which signifies low enthusiasm for upward movement. It likely means it's a matter of time before price succumbs and drops to the lower levels of support.
A sucker's rally is when price explodes upwards without any real technical support, slowly fizzles out and drops lower from where the rally started. The thing about sucker's rallies is that they can only be called that AFTER the price drops below the starting point of the rally and by then the suckers have already been made. It's possible BTC moves higher and negates the "sucker" nomenclature of the rally but once again while there's mixed signals, the overall structure is bearish and price will likely move lower.
BTC broke above the triangle (orange) and will likely retest the confirmation line (yellow) and/or downtrend resistance dating back to 2017 (red). I'll take a position here and sell off at those resistances with a stop loss set under the support base line (green). Trend is still bearish but breaking above with all that support increases the probability of retesting those resistances so it's relatively low risk to buy this breakout so long as I take quick profits.
BTC pushed above the confirmation level. 1st target hit.
Everything between the confirmation line (yellow) and the baseline support (green) is a zone to reload. Stop loss is set below the baseline support.
Stop loss hit for a net break even after fees. If price moves back into the reload zone then I'll reenter but for now it's back to wait and see.
If price breaks above the orange line I'll buy that breakout with the confirmation line as the selloff target. It's possible price may move between the confirmation line and the dotted green line support so the reload zone reflects that short term support. Stoploss is set under that support.
Price moved above the orange trendline and into the reload zone, trade active.
Trade is back on. Buying in 1% higher but the structure held and entering after the breakout above $9300 is worth the premium compared to the risk of BTC dropping substantially.
I didn't redraw a short term resistance trend line. On this chart it's the pink dotted line. That's the breakout above $9300 that should be a level changer.
Good break out of the pink dotted down trend line and above the 50MA. A confirmation close above it should lead to a retest of the long term downtrend resistance line (red).
BTC broke above the major down trend resistance (red) hitting my target and closing out the trade. Now I'll wait for confirmation for BTC to stay above it before reentering.