Bitcoin: 40K Break Trend Change?

Bitcoin rejects the 50K resistance area and goes from 49K to 41,500 over a two day period. If you have been following my analysis on here you should NOT be surprised. I have been highlighting the extreme risks above 46K in my articles AND my streams since the beginning of the month. Is this an adequate pullback to buy into? I will address that now.

The first question that we must consider is: has anything changed in terms of trend? From a technical perspective, NOT YET. The 40K support is still intact, and until this level is clearly compromised, it is still within reason to anticipate the overall support to hold. One thing to keep in mind though, there is a large red candle coming off a major resistance level and this means momentum is bearish. IF this momentum continues, 40K can break at which point a change in trend would be in play.

For this reason, BEFORE considering any swing trades on the long side, I will WAIT for a complex reversal pattern (see illustration on chart). This can appear in the form of a classic double bottom or failed low in the 40K AREA. A couple of green inside bars is NOT enough in this situation because of the recent surge in momentum. Typically inside bars in this configuration are often momentum continuation patterns which at the moment favors the bears.

In previous reports and streams I have specifically mentioned the relevance of the monthly time frame and potential of a bearish C wave developing. IF 40K breaks, this further confirms that argument. A bearish C wave can potentially lead to a test of 15K (this can take months to play out). It is important to be cognizant of this scenario particularly for investors who plan to dollar cost average into the next pullback. Don't make the mistake to getting too big too soon.

There is no way to know if 15K will be tested, maybe the bottom of C turns out to be 30K, or maybe Wave C never unfolds at all, and 40K holds. The point is, don't get married to any opinions bullish OR bearish. Avoid getting swept up into the nonsense machine (the internet). You only need a few components of information to make reasonable decisions. Start with having a repetitive way to identify trend and changes of trend, and second the same for KEY support and resistance levels. These two components alone can improve decision making because they help you align with market intent.

This game is NOT about "thinking" and being right. It is about ADJUSTING as the market processes new information. Unless you are ahead of the information curve, you have to accept that the market is ALWAYS right. It can do whatever IT wants, WHENEVER it wants for ANY REASON. Charts help to isolate a probable range of scenarios which you can reference to better quantify risk. The more you over think it, the greater the chance that you lose.

Thank you for considering my analysis and perspective.