Hello folks! It's been a minute since I last gave you guys an update. Since then, there has been quite excitement going on in BTC's price action. Somehow, the bulls have managed to make a last minute comeback.. but it's unlikely that this will be the last fight!
There were no signs of a clear reversal in the trend, which indicates there is more downside to come. The BEARS really have been losing their steam over the past few days, which makes sense as there was not much more sentiment for them to crush. Considering that we just blew past the 2 hour 20 EMA and 50 EMA with very mediocre volume, it seems that the bears threw the towel in for now and allowed the FOMOBOYS to get back in the game. It is this kind of chop that can hurt the most, so it's important to follow your strategy until there are confirmed indicators. It's likely that the bulls FOMOing will get crushed on this trade. The risk for reward is still not very good.
On the charts I've pointed out several bottoms during our down trend, and labelled them for what they are. I've also made our buy volume bars bright green for visual effect. BOTTOMS are well... the bottom of a cycle, and you can see there is HIGH volume sell-off, followed by an immediate bounce with less volume. This is normal market movement. During a trend, price action occurs in a channel, and smaller trends can be made within the channel as we touch the bottom and top of the channel. On the other hand, what we saw on FEB 6th, was a REVERSAL. This is clearly indicated from the fact that we fell far below our bear channel with HIGH volume, and immediately bounced back up with HIGHER volume. This was the beginning of a new trend, which ultimately failed when we reached the top of our previous bear channel.
Now the question is, was our dip down to 6400 the past few days a BOTTOM, a REVERSAL, or NEITHER? Only time will tell, but I would hold off making my bet until the 7700 level is up for contention once again. We blew past the 7200 resistance (previous support) with ease, and given the previous support at the 7700 level, I expect to have major resistance. If by some miracle the bulls are able to take over the 7700, that would be confirmation that we have successfully recovered from the BOTTOM.
I repeat, a REVERSAL has yet to be seen, and I'll continue keeping you guys updated. I'd hold off on playing in this chop; I find manipulation levels given our low volume to be very high. The goal in a downtrend is capital preservation, and so I personally only feel comfortable taking on the most conservative bets. These types of markets are focused on MAXIMUM PAIN. So In any case..
You're responsible for your own choices, and this is my own personal analysis; there are always risks involved. I try to lay out the potential risk:reward in the near future for entertainment purposes only.
gl;hf
There were no signs of a clear reversal in the trend, which indicates there is more downside to come. The BEARS really have been losing their steam over the past few days, which makes sense as there was not much more sentiment for them to crush. Considering that we just blew past the 2 hour 20 EMA and 50 EMA with very mediocre volume, it seems that the bears threw the towel in for now and allowed the FOMOBOYS to get back in the game. It is this kind of chop that can hurt the most, so it's important to follow your strategy until there are confirmed indicators. It's likely that the bulls FOMOing will get crushed on this trade. The risk for reward is still not very good.
On the charts I've pointed out several bottoms during our down trend, and labelled them for what they are. I've also made our buy volume bars bright green for visual effect. BOTTOMS are well... the bottom of a cycle, and you can see there is HIGH volume sell-off, followed by an immediate bounce with less volume. This is normal market movement. During a trend, price action occurs in a channel, and smaller trends can be made within the channel as we touch the bottom and top of the channel. On the other hand, what we saw on FEB 6th, was a REVERSAL. This is clearly indicated from the fact that we fell far below our bear channel with HIGH volume, and immediately bounced back up with HIGHER volume. This was the beginning of a new trend, which ultimately failed when we reached the top of our previous bear channel.
Now the question is, was our dip down to 6400 the past few days a BOTTOM, a REVERSAL, or NEITHER? Only time will tell, but I would hold off making my bet until the 7700 level is up for contention once again. We blew past the 7200 resistance (previous support) with ease, and given the previous support at the 7700 level, I expect to have major resistance. If by some miracle the bulls are able to take over the 7700, that would be confirmation that we have successfully recovered from the BOTTOM.
I repeat, a REVERSAL has yet to be seen, and I'll continue keeping you guys updated. I'd hold off on playing in this chop; I find manipulation levels given our low volume to be very high. The goal in a downtrend is capital preservation, and so I personally only feel comfortable taking on the most conservative bets. These types of markets are focused on MAXIMUM PAIN. So In any case..
You're responsible for your own choices, and this is my own personal analysis; there are always risks involved. I try to lay out the potential risk:reward in the near future for entertainment purposes only.
gl;hf
Personally, my prognosis for BTC has not changed.. but of course, I'll keep you guys posted. For those attempting to trade the chop, set your stops tight, and be careful out there!
As always,
gl;hf
- Jay