Bitcoin: 2 Scenarios For Longs.
Bitcoin reversal is now in play and the bearish price structure is now compromised. For those who managed to get long somewhere between the 40 and 44K area, the 48K resistance is a good place to start taking profits, especially if your risk is more than justified. For those who missed the move, there are two continuation scenarios to consider for the coming week.
The first is the aggressive long scenario which is less ideal because of the greater chance of getting stopped out. This would be when the current candle closes and the high is taken out during the next session. The entry price would be around 48,650 and price will need to clear the 49K are QUICKLY if this new bullish momentum is going to follow through. If upon entry, price presents a bearish reversal somewhere between 48 and 50K, then that would negate the trade idea altogether and adjustment would be warranted. Risk would be defined somewhere just below 47K. In order to justify this risk, Bitcoin will need to push 51K.
The second is the higher low somewhere between 44 and 46K. Price will need to confirm the buy signal by presenting a candle stick reversal somewhere in this price zone. Upon the close of the candle and break of the high, a new and more attractive buy signal would be in play. Why more attractive? Much better reward/risk because of the there is more room between the entry and the first resistance area (48K).
Within the context of the new bullish structure, resistances like 48K should break while supports like 45K or 40K are more likely to hold. IF 40K is broken for whatever reason during the following week, then the bullish structure is no longer in play.
Only you can determine if the risks in this situation are appropriate for you. If you depend on hope, hype and other randomly generated information to make your decisions, then your outcome will be random and eventually negative. Hope will keep you on the wrong side of the market long enough to give back any randomly generated profits, plus some.
All the information that a swing trader needs to make a reasonably informed decision is on a chart, but you have to choose carefully. More is NOT better. The first step is to recognize the context of the situation and then to anticipate scenarios within reason. Each scenario will be comprised of a SPECIFIC RISK. Knowing and accepting that is much more important than estimating the "rewards". The herd reacts to everything they see and hear, are driven by emotions and focus on what they can make, not lose.
Thank you for considering my analysis and perspective. I hope you find it helpful.
The first is the aggressive long scenario which is less ideal because of the greater chance of getting stopped out. This would be when the current candle closes and the high is taken out during the next session. The entry price would be around 48,650 and price will need to clear the 49K are QUICKLY if this new bullish momentum is going to follow through. If upon entry, price presents a bearish reversal somewhere between 48 and 50K, then that would negate the trade idea altogether and adjustment would be warranted. Risk would be defined somewhere just below 47K. In order to justify this risk, Bitcoin will need to push 51K.
The second is the higher low somewhere between 44 and 46K. Price will need to confirm the buy signal by presenting a candle stick reversal somewhere in this price zone. Upon the close of the candle and break of the high, a new and more attractive buy signal would be in play. Why more attractive? Much better reward/risk because of the there is more room between the entry and the first resistance area (48K).
Within the context of the new bullish structure, resistances like 48K should break while supports like 45K or 40K are more likely to hold. IF 40K is broken for whatever reason during the following week, then the bullish structure is no longer in play.
Only you can determine if the risks in this situation are appropriate for you. If you depend on hope, hype and other randomly generated information to make your decisions, then your outcome will be random and eventually negative. Hope will keep you on the wrong side of the market long enough to give back any randomly generated profits, plus some.
All the information that a swing trader needs to make a reasonably informed decision is on a chart, but you have to choose carefully. More is NOT better. The first step is to recognize the context of the situation and then to anticipate scenarios within reason. Each scenario will be comprised of a SPECIFIC RISK. Knowing and accepting that is much more important than estimating the "rewards". The herd reacts to everything they see and hear, are driven by emotions and focus on what they can make, not lose.
Thank you for considering my analysis and perspective. I hope you find it helpful.
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