Bitcoin is a monthly and weekly bull market and currently in a daily bear move which I would categorize as a consolidation. In my early posts I was concerned that we could have topped and opened up a parabolic crash. While that is still possible, I don't find it as likely since this move has taken so long. Had we broke down last month, I would be more cautious.
So I look to buy major dips in a bull market. As a cycle trader, I'm trying to buy during daily cycle lows. Since bitcoin tends to form cycle lows every 55-60 days I'm looking to buy a reversal between day 45 and 65. The timing band is that yellow area so this is statistically more likely to reverse in the next 15 days. Its not guaranteed and cycles aren't 100%, but we have an advantage when we buy in timing bands.
There 3 areas I'm looking to buy.
1. $9k-$9500 - This is my least favorite as this will be harder to buy. However, its hard to ignore bitcoin in 2019 as it has a habit of forming a range low support that holds. Just like $7400 in June held. So if we form a rounded bottom here over the next week and start to reverse up, and back over $10100 then I'm going to start to build a long. Unfortunately, it would be a move where I'd have to just slowly add as we break new levels and hold support, but with almost everyone expecting a break down, it would be a very bitcoiny thing to see us just hold here.
2. $8500 area - This area has a lot of confluence. There is a CME gap, a monthly open and a 200 DMA all in the same area. It seems obvious and I think almost every trader will be a buyer there. That makes me think it might get over run.. but in the past when I've ignored the obvious just to be a contrarian I've missed super obvious moves. With enough confluence you get everyone buying and support holds and up you go. The only other problem I have with this area is that when the major daily support at $9k breaks down you would expect momentum to take it down much further. So if we do go down to $8500 I would like to see a quick move down that is bought up instantly and doesn't spend much time down there.
3. $7000 area- This is my favorite area. Especially if we get a really aggressive move. There is some support and that last major low. There is a huge gap where we have no volume from $6500-$7200. This will be an area ripe with stops. I think it will also be very hard to buy and you may have to just wait for the reversal, but a huge wick down there like we had in May or early July would be glorious.
So I look to buy major dips in a bull market. As a cycle trader, I'm trying to buy during daily cycle lows. Since bitcoin tends to form cycle lows every 55-60 days I'm looking to buy a reversal between day 45 and 65. The timing band is that yellow area so this is statistically more likely to reverse in the next 15 days. Its not guaranteed and cycles aren't 100%, but we have an advantage when we buy in timing bands.
There 3 areas I'm looking to buy.
1. $9k-$9500 - This is my least favorite as this will be harder to buy. However, its hard to ignore bitcoin in 2019 as it has a habit of forming a range low support that holds. Just like $7400 in June held. So if we form a rounded bottom here over the next week and start to reverse up, and back over $10100 then I'm going to start to build a long. Unfortunately, it would be a move where I'd have to just slowly add as we break new levels and hold support, but with almost everyone expecting a break down, it would be a very bitcoiny thing to see us just hold here.
2. $8500 area - This area has a lot of confluence. There is a CME gap, a monthly open and a 200 DMA all in the same area. It seems obvious and I think almost every trader will be a buyer there. That makes me think it might get over run.. but in the past when I've ignored the obvious just to be a contrarian I've missed super obvious moves. With enough confluence you get everyone buying and support holds and up you go. The only other problem I have with this area is that when the major daily support at $9k breaks down you would expect momentum to take it down much further. So if we do go down to $8500 I would like to see a quick move down that is bought up instantly and doesn't spend much time down there.
3. $7000 area- This is my favorite area. Especially if we get a really aggressive move. There is some support and that last major low. There is a huge gap where we have no volume from $6500-$7200. This will be an area ripe with stops. I think it will also be very hard to buy and you may have to just wait for the reversal, but a huge wick down there like we had in May or early July would be glorious.