Since BTC price has closed on an all time high this week, the 42K close couple of weeks ago is a confirmed higher low and RSI is confirmed a lower low. This divergence along with incredible strength on ADX puts the bias to the upside. I have put a Fib extension target blue box from the last swing and this target can certainly get hit. If we see a rip to the upside, it will make me a bit nervous rather than a gradual steady move. The way the price is setting up, there is a lot of room to the upside indeed and I am sure a lot of folks will be calling for 100k by the next hourly close. However, I like to take stock of what may derail the next potential moonshot; let's take a look.
1. The weekly volume is still under average compared to other breakout moves in the past few months.
2. Price is pushing above my red box resistance area. We need price to make a decisive move with volume and make the red box a support.
3. Price hasn't quite made a full test of 10 weekly EMA for a while. If we see a sharp down move towards the green box and recover without a weekly close under the box, would make a stronger case for a longer, sustained upward move. With BTC, it may not happen until the bull market ends, so I will not hold my breath.
4. If there is a short terms down move, any daily close below around 50 K will make the structure very shaky. If things start to cascade and we get a weekly close below around 48.5, then we will be staring at a potential bearish divergence, and a continued three shots of bearish divergence. That will not be very good for the price.
So, I will be watching and buying any short term dips, but also will be very cognizant about risk management. I won't set a stop loss too close, because if BTC decides to touch and run, there will be no way to catch that boat once it leaves. Then again I don't want to lose all the incredible gains that BTC has provided in the last few months. So, this will be the time to watch the charts like a nerdy hawk until we get the decisive move confirmed. I will set some trailing stops and stop buy orders just in case something crazy happens while I am sleeping. Whatever happens next, could be something for the history books. Good luck out there.
1. The weekly volume is still under average compared to other breakout moves in the past few months.
2. Price is pushing above my red box resistance area. We need price to make a decisive move with volume and make the red box a support.
3. Price hasn't quite made a full test of 10 weekly EMA for a while. If we see a sharp down move towards the green box and recover without a weekly close under the box, would make a stronger case for a longer, sustained upward move. With BTC, it may not happen until the bull market ends, so I will not hold my breath.
4. If there is a short terms down move, any daily close below around 50 K will make the structure very shaky. If things start to cascade and we get a weekly close below around 48.5, then we will be staring at a potential bearish divergence, and a continued three shots of bearish divergence. That will not be very good for the price.
So, I will be watching and buying any short term dips, but also will be very cognizant about risk management. I won't set a stop loss too close, because if BTC decides to touch and run, there will be no way to catch that boat once it leaves. Then again I don't want to lose all the incredible gains that BTC has provided in the last few months. So, this will be the time to watch the charts like a nerdy hawk until we get the decisive move confirmed. I will set some trailing stops and stop buy orders just in case something crazy happens while I am sleeping. Whatever happens next, could be something for the history books. Good luck out there.
