This market along with a few others like ETH and BTC are in a relentless uptrend that is obvious. What you do not want to get caught in is the euphoria surrounding these moves. There will be all kinds of overly optimistic reports saying that these markets are going up forever, with all kinds of outrageous targets. When this sentiment reaches extreme, that is usually a sign of a top. That goes with the saying, the crowd is always wrong at tops and bottoms so I am certainly a contrarian at these levels.
Even though I will not get caught up in the hype and not buy into highs, this market is worth evaluating for proportional targets and support levels that would offer attractive buying opportunities IF price revisits them in the near future. The market will eventually retrace, all markets do, and when that scenario unfolds, I want to be prepared with a solid plan instead of reacting like the market crowd. As the market rises, the potential levels that would serve as reference points to look for entries will also adjust proportionally.
At this moment 65 is the .382 of the current swing and the 55 area is the .618. These are the levels that I would look for if the market retraces off these highs. If price can revisit these levels, that is when I would be looking for reversal patterns for a risk assessment and entry. Targets, just like support levels are proportional to the current price structure and the 84 area (which is the 3.618 extension of the subwave 1) is the next target and may be reached before a significant retracement materializes.
The other perspective to consider is . This is a Wave 3 of 5 that shows no signs of momentum or weakness at the moment. If I was long, I would be selling some into this strength, raising the stop and holding on to a small portion of the position to see how price behaves around the 84 target area. The only thing is there are 5 subwaves that are complete which forces me to sit out and wait for the Wave 4 correction. Waiting out while the market appears to be going straight up is probably one of the most challenging situations we face because of the internal struggle of not wanting to miss out. The solution is stop focusing on the profit, and instead focus on the risk. Buying highs may work once or twice, but as some of you know, eventually you will get hammered and if you don't believe me, it's okay because the market teaches this lesson often.
In summary, this market is clearly strong with no signs of pull back or weakness at the moment. Great if you are in, but more risky if you are out wanting to get in. Price may rise to the 84 target area before showing any possibilities of a retrace, but in my opinion, as price rises, risk rises as well. The best I can do is prepare myself for when the market retraces by having specific levels to anticipate, and entry criteria for those levels. The current wave count also shows 5 complete subwaves which I interpret as an increased chance for pull back, it is just a matter of waiting it out. And if it goes dramatically higher, I simply adjust my levels and continue to wait. Remember successful speculation in any market is not about being right, it is about stacking probabilities because that is all we can control. Everything else is up to the market.
Comments and questions welcome.
You speak as if it's not as risky for the people already in the profit to keep in the trade as the people wanting to get in. I think that's false, the risk is the same for everyone, assuming that they are traders and are trading with their equity which should mostly be profits, now if these profits are current or old or of the current trade I think is irrelevant.
At the same time I understand you and I share your discomfort of getting in a market that is high and seems overextended.
Good luck and have fun!
More specifically, to build on your comparison, when you're in from 30, I'm in from 80, it goes to 95 and then proceeds to go back to 30. I would have sold into 90-95 range which I would have pre-determined when I made my trade at 80, now, what I'm saying is, that there is no reason to let 10% of my position stay in, thinking, maybe it will break 100, and then cash that out at 30 for a loss. If it did go past 95, I would re-assess my strategy, and maybe trade on a good bullish breakout at 103, hoping for a parabolic increase, and would have stop-lossed out at 100 as soon as my trading plan did not work out.
Now, granted, with my trading style, I do miss out on a portion of gains in this insane perma-bull (at least long term perma-bull) market, but I also mitigate a lot of the risk when the curtain gets raised. It then allows me to compound my gains.
Best of luck to you!
Too much BTC rotating out of all time highs. That's the fundamental driving this.
Throw TA out the window