BITMEX:XBTUSD   Bitcoin / US Dollar Perpetual Inverse Swap Contract
Previous/Current position?
After a week of indecisive movements and volatility , we've made quite a lot of small LONG trades.
We did go up $300 since my previous LONG Call.

What's happening?
BTC has been pretty volatile for more than a week now. The volatility is limited between 3900 and 3600. Now, we could trade SHORT from this channel's TOP or LONG from the bottom until, it breaks out in either direction.

What's interesting to note is that volume is decreasing.

With current volume , it is difficult to break out towards 4300.
We have a wedge forming with the uptrend support and the neckline of the supposed iHnS.
I believe a break of 4k will render the iHnS true whereas a break of 3600 will mean that the iHnS is invalid.

So, if you wanna trade the break out, 4k and 3600 is where your orders should be at to enter a LONG or SHORT respectively.
Now, with decreasing volume , a pump here would be meaningless as without decent volume , holding the price above 4k would be practically impossible. If we do not break 4k within next couple days, I believe we'll break the uptrend support, find support around 3500 and if that doesn't hold, look for new lower lows eventually.
It's not easy to break out of this channel for good. As we saw previously, we broke the previous uptrend support but bounced back into the channel.

In simple words, charts are still bullish whereas market is giving some bearish signs due to this delay in break out.

Fibs Theory
We didn't get a 61.8% retracement from the previous uptrend and bounced from 50% retracement .
1. Trend based Fib extension of the left shoulder's tip (3435), Neckline's beginning (4423) and the tip of the head (3121) - Green Rectangle
2. Trend based Fib extension of the neckline's beginning (4423), tip of the head (3121) and Neckline's second contact/previous high (4242) - Blue Rectangle
3. Trend based Fib extension of the current bottom/tip of iHnS (3121), previous high (4242) and previous low (3568) - Red Rectangle
4. Trend based Fib extension of the previous major high (4242), Previous low (3568) and previous high (3966) - Yellow Rectangle

78.6% of Trend Based Fib 1 and 23.6% of Trend Based Fib 2 defining the top of current channel
50% of Trend Based Fib 1 and 2 defining the bottom of the current channel
Uptrend targets
Using Trend Based Fib 2 and 3, we have 4733 and 5378 as possible targets.
Downtrend targets
Using Trend Based Fib 2, we have 2942 and 2139 as possible targets.
Using Trend Based Fib 4, we have 2863 and 2183 as possible downtrend targets

My sentiments
Short Term - Bullish
Mid Term - Bullish
Long Term - Bearish

How am I going to trade this?
Considering we are still in an short/mid term uptrend, I wouldn't want to open a SHORT position here.
But looking at the emerging bearish signs, this seems like a perfect scenario to hedge your position.
Open a low leverage SHORT Position in one bitmex account using proper staggers upto 4400. SL at 4450
Open a medium leverage LONG Position in another bitmex account using proper staggers upto 3440. SL at 3420
Keep taking profits regularly from both positions until we have a clearer picture.
LONG is still the play until we break 34-3500 in my opinion. So setting up a LONG from 3450 to 3740 won't be a bad idea.

What are my indicators saying?
4hour and daily, both are green at the moment.

4hour and daily are both red and are at 3796 and 3742 respectively as can be seen from screenshots above.
FOMO Momentum Scalper
On 4hour, Momentum is low on either side since 30th December indicating indecisiveness.

On daily, momentum is still in favour of Bulls

Comment: Another contact with the uptrend.
Comment: We just made another contact with the Uptrend.
This isn't looking very good for LONGs.
Comment: Two contacts in last 8 hours
FOMO 4hrly has turned red.
I'm still in both LONGs n SHORTs.
Comment: Nice $150 pump
My next TPs for LONG are 4128 and 4240
Volume is still extremely low which is a reason for concerns.
If we get some volume soon, I can see this going to 4300.
And as I have mentioned earlier, if we break 4420, it should be a smooth ride to high 4ks or even low 5ks.
Comment: Another BART SIMPSON.
We are forming a bear flag here and this could lead to a break down to low 3400s.
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