In this post, I talk about what happened in Bitcoin and how we positioned ourselves, upcoming Bitcoin stages, and also define some conditions for the alt-season and speculate an idea for the near future.
Last Week:
Firstly, I am not a wizard but we did actually make 140% return in last week. Here's a short reminder of how we've done it and this is probably the last time we remember these moments because the upcoming phase will be different. Difference mostly stems from the increasing volume. It is still healthy to have a reminder of the last week's patterns to be able to clearly spot the changes in the market. Underlying reason for my upcoming ideas is that I am expecting a retracement phase. If the price has already found its support to break above 12,000-12,100, all the upcoming ideas lose its validity. First signal that caused me to turn bullish from bearish was price breaking above 10,900 and by doing so, it break through the mid-level of the descending/blue trend line, cherry trend line. I also defined the last point for bears to hold on was the same range there were no prominent daily or weekly resistance points after. It was all clear up to 11,500. Price had a rest after breaking key resistance levels and I positioned my orders on the retracement of this rest. All my trades have x10 leverage. Below are the trades I took:
Buy-1@10,835 and Buy-2@10,645
Sell-1@10,980 (25% return)
Sell-2@11,405 (65% return)
45% average return
We had an average of 45% return from these trades however it could be better. Problem was not the entry points but I had early exits. My first mistake was to think that golden trend line will be the first point to be tested but price just went through it. However we were still able to go for another long on the S/R flip of the golden trend-line. But I have to admit that I wasn't brave enough to put more volume on this trade and kept it mid-volume. But I was lucky enough to be at sleep when the price topped above 12,000 and it was already hovering around 12,250 when I woke up. What I saw was that the all trend-lines have been broken, all bears were down however we were further away from the broken trade-channel tops. Price seemed to having an overshoot since the broken levels have never been tested as support levels. All these signals were traded as below:
Buy@11,620
Sell@12,280 (56% return)
But it was too risky to open a short position above 12,000. Both the bar amplitude and the volume looked strong when price broke above the key resistance levels.
At this point, price had a $1000 retracement that made me believe that there is a retracement phase upcoming. As the price went even below the golden trend line, we flipped that former support into a resistance and I had a short entry at 11,690. I was also expecting the price to jump above 12,000 area and also make a lower high from the previous high (12,340). I had 2 Fibonacci signals to believe in that. Also remember that I anchor my Fibonacci extremes mostly on big evens because as I also mentioned, this is mostly how algorithms work, on big evens.
1st reason:
2nd reason:
Sell@11,690
Buy@11,580 (10% return)
Where to short?
To reduce the risk of the trade, again, I applied Fibonacci retracement for the last drop and had my second attempt to short at 12,025, 0.786 level. Now, I just closed it at 11,710. Stop-loss was the previous high at 12,340. (Actually not exactly this point but within the retracement of the last movement.)
Sell@12,025
Buy@11,710 (26% return)
This Week:
3 red circles on the top-left of the screen shows why on my previous post I told you not to trade. After breaking above a trade channel, price tends to generate false signals to liquidate traders before making new highs. I have 4 entry points first one is the grey range but I buy it for a short term trade. Entry range-1 is a key level, it is the cherry range. I consider having half of my long position at this point. I believe second and third entry ranges still provides profitable entry points but if the price drop extends to these levels, I will take that as a weakening of the bullish momentum.
For the exact placement of the entry orders, you can check the Fibonacci levels on the image below.
0.5 level is in the similar levels with the cherry-range, 11,000. 0.786 level is around 10,400. I don't pick 0.618 as a support because I think if price drop extends to 0.618 with considerable bearish momentum, it is quite possible to broke below 0.618, to 0.786. This Fibonacci level corresponds to the blue range. Last point of support is the black range. This is the bottom of the ascending/colored channel, 10,300. If price goes below this point, it also indicates strong bearish pressure on the long term. So, last entry range is also the stop-loss point.
I don't think having a short position until 14,000.
Alt-Season
Alt-season needs a confirmation. A confirmation that Bitcoin is going for a new ATH. If you check the chart on daily, weekly, and monthly there is one point distinguishes from all other points, 13,900. This is the point to be broken to announce an alt-season. On my wildest guess, I am expecting Bitcoin to retest this level and go for a retracement. If there is indeed an alt-season incoming and Bitcoin is actually going for ATH, alt-season may just start when Bitcoin is on the retracement phase. So watch out for how strong is the movement when it reaches 13,900 and how alts react to it. But as I said, these are all speculations.