We have a confluence of factors pointing in the same direction. Here's the data points and anticipated targets:
Bull:
-Swing Failure Pattern at yesterday's close on the daily candle. Good enough pattern to justify entering a small long on it's own.
-Bullish Divergence on the daily RSI. This has been followed by a 40% move every time it has appeared at the oversold line since January. I entered a long as soon as it was evident and got stopped out, but so far this year it has always resulted in a counter-trend rally even if it retested support first. So it's time to try again.
-Open Interest. Shorts are currently at 36,500 BTC on Bitfinex ($233 million), with a significant portion of those entered at sub 6.2k. As price has moved up 5% the shorts have continued to increase. This means a good portion are underwater, and recent selling has been somewhat artificial as it's margin sells rather than actual holders selling. Coincidentally, we are nearly at the same level as the last big short squeeze in early April.
Bear case:
-It's always possible the other side knows something you don't and the consensus at this moment, as measured by the open interest, is definitely short.
-If we do go back down to 5.8k, it's highly unlikely support would hold again and the shorts would make a killing as we crash through to the next major support.
Summary
-my edge is comprised of the bull data points: chart patterns combined with divergences (on high time frames- daily candles and above) and an unstable market structure. It's enough to enter a long and has a high probability of being successful.
-entered BTC long at 6094.
-target is 8200.
*If you're a new trader make sure you use stop losses, and size your position so that you're still ok if it goes against you. The key here is consistent profitability, and the only way to do that is by keeping downside risk exposure low. (I'd suggest 5% as a maximum loss. Many don't go over 2%)
**It's also a good idea to ignore those who are trying to create a narrative and stick to data points and probabilities instead.
Bull:
-Swing Failure Pattern at yesterday's close on the daily candle. Good enough pattern to justify entering a small long on it's own.
-Bullish Divergence on the daily RSI. This has been followed by a 40% move every time it has appeared at the oversold line since January. I entered a long as soon as it was evident and got stopped out, but so far this year it has always resulted in a counter-trend rally even if it retested support first. So it's time to try again.
-Open Interest. Shorts are currently at 36,500 BTC on Bitfinex ($233 million), with a significant portion of those entered at sub 6.2k. As price has moved up 5% the shorts have continued to increase. This means a good portion are underwater, and recent selling has been somewhat artificial as it's margin sells rather than actual holders selling. Coincidentally, we are nearly at the same level as the last big short squeeze in early April.
Bear case:
-It's always possible the other side knows something you don't and the consensus at this moment, as measured by the open interest, is definitely short.
-If we do go back down to 5.8k, it's highly unlikely support would hold again and the shorts would make a killing as we crash through to the next major support.
Summary
-my edge is comprised of the bull data points: chart patterns combined with divergences (on high time frames- daily candles and above) and an unstable market structure. It's enough to enter a long and has a high probability of being successful.
-entered BTC long at 6094.
-target is 8200.
*If you're a new trader make sure you use stop losses, and size your position so that you're still ok if it goes against you. The key here is consistent profitability, and the only way to do that is by keeping downside risk exposure low. (I'd suggest 5% as a maximum loss. Many don't go over 2%)
**It's also a good idea to ignore those who are trying to create a narrative and stick to data points and probabilities instead.
Trade active:
looking good so far! cost averaged down to 6030. stops moved up past breakeven.
Trade closed: stop reached:
Wish I could say I took profits, but I didn't.