Battle Planning: What if Bitcoin Double Tops?
Zaktualizowano
The trend has obviously been up and bullish but the chance of a double top remains real until it has passed. There have been many times over my trading career where I did both a bullish and bearish scenario "just in case" and was biased in the wrong direction for my initial position. Sometimes I did a good job switching my trades and some times not. But really, having a plan either way is good and knowing what will trigger deliberate action is very good.
Personally I have closed my margin long positions on link end eth while I watch this develop and I have taken a small ethusd short that should keep my account balance roughly flat no matter which way the market goes. Additionally you see the X I like to use on a lot of price action to see trend lines flipping support and resistance.
Null Hypothesis
The long term trend continues and price action keeps going up. My ETHUSD short keeps my account stable in USD terms and I close the trade and look for margin long entries.
Scenario 1
Price action dips to the black trend line some 20% and support is found with volume. This sets up BTC to go to new all time high and when I close my ETHUSD short and shovel the usd into my prefered alts.
Scenario 2
Price breaks the black trend line. I add to my ETHUSD short and plan to close in the target area around the previous ATH. The target is set by two critera: the hight of the valley between the peaks of the double top as shown by the black line, and the area of activity prior to the break out. That purble zone contains the top of the value area on the VPVR and in intense bull markets the price action retests this area constantly.
Scenario 3
Price goes sideways. Least likely off all scenarios.
Long term Concerns
The chart below is BTCUSD with my long term top indicators. The Bitcoin Log Growth Curves are divided into sub-channels and I find the activity around the midline (76.39 and 38.20%) play a special role as support and resistance as levels and as a zone. A break of this double top would take us very probably to the 23.61% level at about 22.3k
Second concern is the Pi cycle. This is suppose to call the tops on the daily chart and some tinkering shows it does this on several assets besides bitcoin and there are some decent signals for local tops. Below we can see on the 3 day chart it predicted an area of consolidation for BTC and on XPRUSD it nearly predicted the first ATH in 2017 and did call the high in the beginning of 2018. With the signal flashing on the above chart on the weekly this might be tagging a local high. Of course this is not the intended use of the indicator but it is still something scratching at the back of my head.
My final long term concern is the Net Value Transactions with these ribbons to provide easy to read detail. The only time we have enough chart history before to look at on the weekly chart that had the NVT pop out the top of the red ribbon was before the great dump of 2017 with our Christmas and New Years massacre. Being out of the ribbon is concerning enough, but there is a real probability that the NVT turns back to yellow and we dump in a big way.
It sounds cataclysmic but that has to be part of the battle plan because it is a big signal used by the heavy hitters. And the fact remains that on the daily, 3d and weekly every time the NVT has crossed the barrier from red to yellow we have traded lower. Lots of people don't like calls like "it might go up, and it might go down" but trying to forecast how it might go up or down is what we are trying to do.
Personally I have closed my margin long positions on link end eth while I watch this develop and I have taken a small ethusd short that should keep my account balance roughly flat no matter which way the market goes. Additionally you see the X I like to use on a lot of price action to see trend lines flipping support and resistance.
Null Hypothesis
The long term trend continues and price action keeps going up. My ETHUSD short keeps my account stable in USD terms and I close the trade and look for margin long entries.
Scenario 1
Price action dips to the black trend line some 20% and support is found with volume. This sets up BTC to go to new all time high and when I close my ETHUSD short and shovel the usd into my prefered alts.
Scenario 2
Price breaks the black trend line. I add to my ETHUSD short and plan to close in the target area around the previous ATH. The target is set by two critera: the hight of the valley between the peaks of the double top as shown by the black line, and the area of activity prior to the break out. That purble zone contains the top of the value area on the VPVR and in intense bull markets the price action retests this area constantly.
Scenario 3
Price goes sideways. Least likely off all scenarios.
Long term Concerns
The chart below is BTCUSD with my long term top indicators. The Bitcoin Log Growth Curves are divided into sub-channels and I find the activity around the midline (76.39 and 38.20%) play a special role as support and resistance as levels and as a zone. A break of this double top would take us very probably to the 23.61% level at about 22.3k
Second concern is the Pi cycle. This is suppose to call the tops on the daily chart and some tinkering shows it does this on several assets besides bitcoin and there are some decent signals for local tops. Below we can see on the 3 day chart it predicted an area of consolidation for BTC and on XPRUSD it nearly predicted the first ATH in 2017 and did call the high in the beginning of 2018. With the signal flashing on the above chart on the weekly this might be tagging a local high. Of course this is not the intended use of the indicator but it is still something scratching at the back of my head.
My final long term concern is the Net Value Transactions with these ribbons to provide easy to read detail. The only time we have enough chart history before to look at on the weekly chart that had the NVT pop out the top of the red ribbon was before the great dump of 2017 with our Christmas and New Years massacre. Being out of the ribbon is concerning enough, but there is a real probability that the NVT turns back to yellow and we dump in a big way.
It sounds cataclysmic but that has to be part of the battle plan because it is a big signal used by the heavy hitters. And the fact remains that on the daily, 3d and weekly every time the NVT has crossed the barrier from red to yellow we have traded lower. Lots of people don't like calls like "it might go up, and it might go down" but trying to forecast how it might go up or down is what we are trying to do.
Uwaga
I have a short entry on XBTUSD. Very technical and I hope for over performance.
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