This view of BTC comes from a background of Price action trading. Trading Fakeout's are quite common in the Forex market and have proven to be a cornerstone of my Trading Strategy.
Fakeout's occur on all timeframes and take the market for an unpleasant ride. Traders Buy the breakout or in this case Short the breakout hoping to jump on the train and continue to lower prices. The liquidity that is generated is consequently used by large players to
1) Scale out of their short positions and
2) To gradually accumulate opposing orders ( In this case Buy orders )
Fakeout's are not hard to anticipate and are somewhat similar to trading support and resistance levels.
The only difference being the sequence in which the market sets itself up prior to the support and resistance bounce.
In this case we can observe that the price on the Daily timeframe has been bouncing between 26,400$ and 27,400$ since May 12.
Price recently closed quite the bearish candle on June 5th ; closing outside of our previously mentioned range.
A good Risk/Reward idea suggests that we may bounce from the bottom of the range.
Fakeout's occur on all timeframes and take the market for an unpleasant ride. Traders Buy the breakout or in this case Short the breakout hoping to jump on the train and continue to lower prices. The liquidity that is generated is consequently used by large players to
1) Scale out of their short positions and
2) To gradually accumulate opposing orders ( In this case Buy orders )
Fakeout's are not hard to anticipate and are somewhat similar to trading support and resistance levels.
The only difference being the sequence in which the market sets itself up prior to the support and resistance bounce.
In this case we can observe that the price on the Daily timeframe has been bouncing between 26,400$ and 27,400$ since May 12.
Price recently closed quite the bearish candle on June 5th ; closing outside of our previously mentioned range.
A good Risk/Reward idea suggests that we may bounce from the bottom of the range.
