BTC/USD: Parabolic rise must cool down
It's true that bull markets can take you by surprise and be irrational for longer than you expect. But it's also true that parabolas don't last forever.
This rise to 11.4k was parabolic. Bitcoin got more overbought on the daily, by my own calculations, than at any time since April 2019. The last time it hit these levels before that was Oct 2017, and only for one day each time.
So (it seems to me) one of two things must happen, on a daily timescale:
1. A retrace to some kind of support level, like the local ones highlighted in green on the chart, or at least the 0.382 or (much) better the 0.5/0.618 Fib retracements, and then continuation. I just don't think the quick touch of 10575 is enough. I could be wrong.
2. A sideways corrective pattern for a few days, like a flag but not necessarily that obvious, during which we get a daily oversold signal (probably just one) on my Price Action Trend | Simple indicator.
I'm totally bullish on Bitcoin and will long the heck out of either of these two when they occur.
Let's not forget there's also the CME gap, highlighted in yellow on the chart. Note that while I believe it's overwhelmingly likely that this will fill on the BTC1! chart, a spike down there wouldn't necessarily match the price on other exchanges, so you can't translate the exact levels.
Finally, since everyone and his dog are now bullish, we can't rule out a good old-fashioned stop-hunt.
#notadvice
Trade safe, everyone.
This rise to 11.4k was parabolic. Bitcoin got more overbought on the daily, by my own calculations, than at any time since April 2019. The last time it hit these levels before that was Oct 2017, and only for one day each time.
So (it seems to me) one of two things must happen, on a daily timescale:
1. A retrace to some kind of support level, like the local ones highlighted in green on the chart, or at least the 0.382 or (much) better the 0.5/0.618 Fib retracements, and then continuation. I just don't think the quick touch of 10575 is enough. I could be wrong.
2. A sideways corrective pattern for a few days, like a flag but not necessarily that obvious, during which we get a daily oversold signal (probably just one) on my Price Action Trend | Simple indicator.
I'm totally bullish on Bitcoin and will long the heck out of either of these two when they occur.
Let's not forget there's also the CME gap, highlighted in yellow on the chart. Note that while I believe it's overwhelmingly likely that this will fill on the BTC1! chart, a spike down there wouldn't necessarily match the price on other exchanges, so you can't translate the exact levels.
Finally, since everyone and his dog are now bullish, we can't rule out a good old-fashioned stop-hunt.
#notadvice
Trade safe, everyone.
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- We got that in the drop to 10.5.
".. 2. A sideways corrective pattern for a few days, like a flag but not necessarily that obvious, during which we get a daily oversold signal (probably just one) on my Price Action Trend | Simple indicator."
- We got that just now.
I'm still cautious, because precious metals are dropping and the dollar could bounce here, both of which are short-term bearish for BTC.
So I did not "long the heck" out of BTC here like I said I would. But I have a couple of altcoin-USDT trades open to get some exposure to the upside if it does go from here.
For what it's worth, I have BTC bids at Fib levels (adjusted for higher high) down to 9k.