Bitcoin has retraced off the of the 76K to 78K AREA and established a double bottom formation (see arrows). I specifically mentioned this in my previous article and talked about it further during my most recent stream. While a bear flag formation IS now present, which implies weakness on the horizon, I anticipate a higher low support around the 80K area this week (see illustration). If it breaks, then 76K should be watched for another double bottom or failed low formation which offers attractive price points for swing trade long opportunities.
This is a wild environment because we have tons of unexpected news constantly affecting the market while at the same time the highest seasonal volume (compared to August). This means moves will be BIG on both sides of the market, people will OVER react AND opinions will be more costly than usual. The first step to navigating such an environment effectively as a swing trader is to FOCUS on LEVELS and NOT news. No matter what the news is, either a level is going to be respected or its not. By focusing on what the herd is not, you can gain an advantage on the market, even if its brief.
Along with that, if you understand how to use dollar cost averaging effectively in this environment, you can start a position slightly earlier while waiting for confirmation before you add. An example of this is while watching for test of 80K, you buy a small position which you can take pain on, which means a much wider than usual stop. IF confirmation appears, you add. While it is possible that after the add the market goes against you, the PROBABILITY of the location and formation FAVORS a positive outcome more. In cases like this it is worth the risk. If 80K breaks without any confirmation, you are still small and you lose less than you normally would because of the adjusted size.
When market sentiment reaches extremes, THIS is when you want to pay CLOSE attention, especially during BEARISH extremes. In order for a market to reach attractive prices, mews typically needs to be negative. During such times, traders tend to avoid the market because the market looks "bad" yet, these same traders buy aggressively at the WORST prices, typically the highs when everything looks "great". One of my long time followers during my stream mentioned he was interested in buying, but only taking small bites because things looked so bearish. My response was that I usually suggest small bites at highs, and right now we are no where near the highs, so slightly greater risk can be justified at these prices for swing trades and investing.
Assuming risk requires confidence. What gives me such confidence is being able to gauge potential risk through analyzing price structure and levels. Wave counts are very helpful in this regard and help me shape reasonable expectations. In this context, Bitcoin at 76K MAY be the Wave 4 bottom. As long as 65K is not touched, a Wave 4 bottom can otherwise be established somewhere between 76K and 66K if 76K breaks. This will go against ALL of the bearish sentiment required to push prices to such levels. Navigating this effectively means you will have to put your contrarian hat on. Pay attention to the levels and confirmations, not what people are saying.
Thank you for considering my analysis and perspective.
This is a wild environment because we have tons of unexpected news constantly affecting the market while at the same time the highest seasonal volume (compared to August). This means moves will be BIG on both sides of the market, people will OVER react AND opinions will be more costly than usual. The first step to navigating such an environment effectively as a swing trader is to FOCUS on LEVELS and NOT news. No matter what the news is, either a level is going to be respected or its not. By focusing on what the herd is not, you can gain an advantage on the market, even if its brief.
Along with that, if you understand how to use dollar cost averaging effectively in this environment, you can start a position slightly earlier while waiting for confirmation before you add. An example of this is while watching for test of 80K, you buy a small position which you can take pain on, which means a much wider than usual stop. IF confirmation appears, you add. While it is possible that after the add the market goes against you, the PROBABILITY of the location and formation FAVORS a positive outcome more. In cases like this it is worth the risk. If 80K breaks without any confirmation, you are still small and you lose less than you normally would because of the adjusted size.
When market sentiment reaches extremes, THIS is when you want to pay CLOSE attention, especially during BEARISH extremes. In order for a market to reach attractive prices, mews typically needs to be negative. During such times, traders tend to avoid the market because the market looks "bad" yet, these same traders buy aggressively at the WORST prices, typically the highs when everything looks "great". One of my long time followers during my stream mentioned he was interested in buying, but only taking small bites because things looked so bearish. My response was that I usually suggest small bites at highs, and right now we are no where near the highs, so slightly greater risk can be justified at these prices for swing trades and investing.
Assuming risk requires confidence. What gives me such confidence is being able to gauge potential risk through analyzing price structure and levels. Wave counts are very helpful in this regard and help me shape reasonable expectations. In this context, Bitcoin at 76K MAY be the Wave 4 bottom. As long as 65K is not touched, a Wave 4 bottom can otherwise be established somewhere between 76K and 66K if 76K breaks. This will go against ALL of the bearish sentiment required to push prices to such levels. Navigating this effectively means you will have to put your contrarian hat on. Pay attention to the levels and confirmations, not what people are saying.
Thank you for considering my analysis and perspective.
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Try Trade Scanner Pro for FREE: bit.ly/TSCPRO
LIVE Day Trades Mon, Wed, Fri 9:30 AM ET: youtube.com/@marcpmarkets.signals
Watch Full Trade Scanner Pro Tutorial: youtu.be/fdFLhLnqM9A
LIVE Day Trades Mon, Wed, Fri 9:30 AM ET: youtube.com/@marcpmarkets.signals
Watch Full Trade Scanner Pro Tutorial: youtu.be/fdFLhLnqM9A
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.