What will I do if Bitcoin Crashes?

TLDR:
• I don’t know if Bitcoin will crash or not. I don’t need to know because I have a trading plan
with strict confirmation/ invalidation points.
Confirmation of the downtrend:
1. Daily close below the trendline.
2. Test the trendline as resistance.
Confirmation of the uptrend:
1. daily close above the range low (29,500).
2. Daily close above the supply zone (30,080)
3. Higher high.
Background:
Do we have a problem?
• Yes.
Why?
• The uptrend is losing steam. Although we are in an uptrend, i.e., making higher highs and
higher lows, this last leg up is not as strong as the previous impulses.
Example:
• From the low to the high, Bitcoin gained more than 105%. It is not improbable that Bitcoin
needs to retrace a bit before resuming the uptrend.
How will we know if the uptrend is over?
IMO, Confirming the loss of the uptrend is a three-stage process:
1. A daily close below the range low (Check)
2. A daily close below the trendline
3. Failure to reclaim the trendline
• A loss of a diagonal trendline is usually the first sign of a downtrend.
Examples:
Bitcoin July – December 2021
Bitcoin January – February 2020
How to trade the downtrend:
1. If you are already in a short trade, don’t close the trade completely before the uptrend is confirmed.
2. Wait for a retest of the trendline as resistance.
3. Short the failure of the retest. Stoploss is a daily close above the trendline.
Invalidation / Confirmation of Uptrend:
1. Daily close above the range low.
2. Daily close above the supply zone (30,080).
3. Higher high (Above 30,800).