BTCUSD Rising Wedge Short - Micro vs. Macro

BITMEX:XBTUSD   Bitcoin / US Dollar Perpetual Inverse Swap Contract

Looking at the 30-minute chart, you see a clear rising wedge just screaming to break down! Volume dwindling, CMF and OBV drying up/going sideways and the Long/Short ratio at 1.35. I added to my short throughout the day and current entry level for the position is just above 7500. Will keep it open with a stop-loss setup above.

Now looking at the Macro...

The flash crash bounced right around both long term support as well as the 0.382 Fib retracement. The buyback was impressive and there is plenty of speculation going on about why it happened, but most of it is simply cognitive dissonance. BTC needed a correction. I personally would like to see a further correction to the 0.5 Fib at $5800-$6000. That is where I will be buying more and closing my shorts if I don't get stopped out. My script I published for free public access got me in at 5825 and stopped me out at 7750. It's a trend strength/following system with built-in risk management, which is why I never get stuck in a bad trade anymore. The risk tolerance is set automatically based on price action and differential formulation as the momentum shifts.

The backtest overlay can be seen on the chart above and you can follow the link below, add it to your favourites on the bottom right of that page and you can use it on your own charts. Do watch the videos attached and read the description on the backtest version link to know how to use it and why it works. Otherwise, send me a message on here, Twitter or on my Youtube channel/email address.

May 18
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