Evening everyone. Here’s a quick look at BTC from my chart. I picked neutral for my strategy but don't let it mislead you. I'm long my long-term position (who isn't?), but no active trades for now.
1) The downward trendline formed by the double tops from June & July is feeling some heat. A close above $11.9k breaks it and maybe the market can reestablish upward momentum from there.
2) This was a great long entry that I was late on but still got a piece of. The RSI crossed the mid-line, MACD fast over slow crossed higher, price closed above the 50 SMA for a signal and confirmed the following day with a higher close. This would still be in progress had I done it on a daily chart instead of a 4h which made the stop tighter due to the narrower ATR.
3) This is the 100 SMA. Price stayed above it during the correction. If BTC was still in a bear market I would expect that level to be broken and followed by a run toward the 200 SMA. Bear market = strong down impulses. Bull market = strong up impulses.
4) Solid upward cross on the 5 RSI. Crossing the mid line is good, but a near vertical cross to announce its direction is great.
5) Fast over slow MA cross on the MACD and the spread between them is growing. Also noteworthy is that it crossed below the zero line. Last time I can find this cross is back in the crypto winter that preceded the rally. If the slow average climbs above zero it looks like we’ll have room to run higher into the fall.
All that’s great. Now…what do we do?
First, we don’t short it. So many posts on here calling for the ‘real bear market’ to show up. I count 78 of 127 candles green since the April breakout. The longer the time frame (thus less noise), the better the ratio gets. I’m ready to change my opinion when the evidence is presented, but it isn’t there. Bull market impulses can go as high as the last retail non-gender conforming market participant can stand to buy…and he/she/it is stupid, so that’s pretty high. That’s a good way to get stopped regularly or to have an unlimited loss if you’re team Livermore (stop trading and go read some books if you don't get the reference). If you get lucky and short a top (which you won’t, because the only way to find a top is to buy it...science), you won’t make your money back since there are buyers waiting at support to save it from breaking moving averages. Then you’ll short the bottom (that’s how to find bottoms) after convincing yourself that the ‘real’ selloff is next. Just stop.
Wait for a buy setup. Price will bounce off the 21 EMA or 50 SMA in due time. Be patient. Let the 5 RSI cross higher or bounce off the mid line, let price exceed the previous high, and go long when it does. I think we’ll see that sooner than later for the market to build steam before it pushes through the previous double tops. If you can’t wait for that, then just give me your money. You’re going to lose it anyways…might as well help me retire early.
Will update when a long entry presents itself. Good luck.
1) The downward trendline formed by the double tops from June & July is feeling some heat. A close above $11.9k breaks it and maybe the market can reestablish upward momentum from there.
2) This was a great long entry that I was late on but still got a piece of. The RSI crossed the mid-line, MACD fast over slow crossed higher, price closed above the 50 SMA for a signal and confirmed the following day with a higher close. This would still be in progress had I done it on a daily chart instead of a 4h which made the stop tighter due to the narrower ATR.
3) This is the 100 SMA. Price stayed above it during the correction. If BTC was still in a bear market I would expect that level to be broken and followed by a run toward the 200 SMA. Bear market = strong down impulses. Bull market = strong up impulses.
4) Solid upward cross on the 5 RSI. Crossing the mid line is good, but a near vertical cross to announce its direction is great.
5) Fast over slow MA cross on the MACD and the spread between them is growing. Also noteworthy is that it crossed below the zero line. Last time I can find this cross is back in the crypto winter that preceded the rally. If the slow average climbs above zero it looks like we’ll have room to run higher into the fall.
All that’s great. Now…what do we do?
First, we don’t short it. So many posts on here calling for the ‘real bear market’ to show up. I count 78 of 127 candles green since the April breakout. The longer the time frame (thus less noise), the better the ratio gets. I’m ready to change my opinion when the evidence is presented, but it isn’t there. Bull market impulses can go as high as the last retail non-gender conforming market participant can stand to buy…and he/she/it is stupid, so that’s pretty high. That’s a good way to get stopped regularly or to have an unlimited loss if you’re team Livermore (stop trading and go read some books if you don't get the reference). If you get lucky and short a top (which you won’t, because the only way to find a top is to buy it...science), you won’t make your money back since there are buyers waiting at support to save it from breaking moving averages. Then you’ll short the bottom (that’s how to find bottoms) after convincing yourself that the ‘real’ selloff is next. Just stop.
Wait for a buy setup. Price will bounce off the 21 EMA or 50 SMA in due time. Be patient. Let the 5 RSI cross higher or bounce off the mid line, let price exceed the previous high, and go long when it does. I think we’ll see that sooner than later for the market to build steam before it pushes through the previous double tops. If you can’t wait for that, then just give me your money. You’re going to lose it anyways…might as well help me retire early.
Will update when a long entry presents itself. Good luck.
Comment:
Down trend line broken @ $11,597 on 7Aug close