The price is moving back to the key support. The price action between $1000 and $800 will be able to provide us trade opportunities and show a direction for the further market movement!
I’m going to surprise you, but we have 2 possible models!
Bullish Model The price reverses from the support and gives us trade opportunities for buying through bullish setups in the daily and hourly time frames. The same goes for a false breakout below the support area. All trades must be used with stop orders below the local swing lows. Profit targets may be 20MA and 50MA from the daily chart and $1450 resistance.
Bearish Model The price moves below the support area and updates the local swing low. It gives us a bearish signal. The downtrend will be continued. I wouldn’t rush with shorting and wait for a retest of the support as a new resistance area. The market will give us trend-following setups for shorting in the hourly time frames. Stop orders for all trades must be placed above the resistance and local swing highs. The nearest profit target for short trades can be the support between $350 and $300.
For those, who don’t see value from the price action around $1000-800, and why we have to talk about trade opportunities in both directions, I recommend you to start reading books about trading right away.
What I described above, it is a plan what you have to do every day, BEFORE buying or shorting any asset. The price is moving to the valuable support and nobody knows, it is going to be a reversal, false breakout or a true breakout situation. But if you plan your trades, you will know how to trade when the price bounces from the support or moves below it.
Do you like this post? If yes, please support it by your feedback! Smash the LIKE button, and write a comment, if you agree or not with my plan. Thank you!
Thanks for sharing. Bitcoin actually looks in identical situation but ETH looks weaker at below 2018 highs. But BTC is very much testing 2018 highs as we speak. Bearish model for me. Looking forward to buying ETH at 350-700 and BTC at 10-12k. Probably not for a while though, advances hostage to the macroeconomic situation.