Bitcoin - The Next Move is Key - Chasing Unicorns
Bitcoin continues to consolidate within the range we have been watching for over two months now. Believing there are some secret levels, or some proprietary indicator that can forecast the future is naive and used solely for click bait. Stop chasing Unicorns focus on structure and order flow!
After having our previous trade stopped out for a 3% loss, we issued another trade off the lower range of the consolidation channel. At first it didn't look so good, but finally it found its legs and hit both our targets in a couple days for an overall profit of 1.8% between the one win and one loss.
We constantly emphasize it is not about being right or wrong, it is about managing risk and position sizing. Many new to trading have no idea of risk management and because they made a few bones in a bull market, they believe they are gurus. Do not confuse a Bull Market with Genius.
Proof in point, how many of these gurus still have their followers investing or over weight Alt coins? Most, in the belief they will miraculously make a comeback, but the charts are showing a different story as Marc pointed out in his recent article.
We are now over 75% weighted in Bitcoin and are looking to increase that weighting. However Bitcoin is in a tough spot here and the next move will dictate how we position from here.
There has been a lot of accumulation under the 10,500 area over the past couple months. This implies there are a lot of longs at these levels. Typical trade the range strategy with fading the lower end of the range with buy orders and fading the upper with sell.
Yet there is some challenge here with order flow. The market is attempting to push higher but the previous consolidation was met with selling pressure around the 10,500 area. This makes it prone to selling pressure once again.
More active participants have zoomed in on just under the mid point of the range and are selling into this area. This makes it prone to a retest of the lower end of the range, or a breakout to 11.300. Here are the risks and it is no secret its just good ole fashion looking for order flow.
A pullback from this level, may attract more buyers, but the risk is the majority of buyers have already bought in. Sellers push through the 9300 level where position and swing traders cut their positions increasing selling pressure and we take out the lower end of the range and push into the low to mid 8k area. That is the risk for longs here.
However, there is also a lot of sellers in this area and if momentum can push through this resistance zone and take out the 11,300 level, we could easily see a spike into the 12-13k area. This is the risks of shorting the potential lower high here.
The key level is 10k for longs, as if this gives way the likely hood of taking out the lower support area increases.
There is nothing to do but let the market play out here. Well there is one thing, do you have a plan for either way the market swings? IF not then you are reacting to the market and not planning to act. We have a plan to position regardless of how the market reacts.
As for the alt coin market it is relatively weak and this is not a market we are interested in until the structure improves.
In the end there are no secret levels, or magical indicators that are going to predict the next move. All we can do is prepare for either scenario based on previous levels of order flow. The challenge is most are looking for Unicorns and fall prey to bull market gurus that are taking them down a rabbit hole of alts and the Bermuda triangle where money disappears.
Anyone pushing alts here needs to have their head checked, or needs to learn to read a chart. Though many started the year off strong like Litecoin and EOS, they have quickly shown how vulnerable and weak they are to corrections and consolidations. While Bitcoin is trading horizontal, they are continuing lower.
How are those TRX bags working? Do you really think XRP is going to go to $50 let alone $200. If it hits $50 it will be over half the value of the entire Gold market. Yeah that's a great probability.
Focus on the chart showing relative strength, and stop buying the crap that looks like S@$!. Yes they can swing lower and if Bitcoin pulls back do you think they will buck the trend? If you do I have a flock of Unicorns for sale with secret feed to make them poop Gold, drop me a line.
After having our previous trade stopped out for a 3% loss, we issued another trade off the lower range of the consolidation channel. At first it didn't look so good, but finally it found its legs and hit both our targets in a couple days for an overall profit of 1.8% between the one win and one loss.
We constantly emphasize it is not about being right or wrong, it is about managing risk and position sizing. Many new to trading have no idea of risk management and because they made a few bones in a bull market, they believe they are gurus. Do not confuse a Bull Market with Genius.
Proof in point, how many of these gurus still have their followers investing or over weight Alt coins? Most, in the belief they will miraculously make a comeback, but the charts are showing a different story as Marc pointed out in his recent article.
We are now over 75% weighted in Bitcoin and are looking to increase that weighting. However Bitcoin is in a tough spot here and the next move will dictate how we position from here.
There has been a lot of accumulation under the 10,500 area over the past couple months. This implies there are a lot of longs at these levels. Typical trade the range strategy with fading the lower end of the range with buy orders and fading the upper with sell.
Yet there is some challenge here with order flow. The market is attempting to push higher but the previous consolidation was met with selling pressure around the 10,500 area. This makes it prone to selling pressure once again.
More active participants have zoomed in on just under the mid point of the range and are selling into this area. This makes it prone to a retest of the lower end of the range, or a breakout to 11.300. Here are the risks and it is no secret its just good ole fashion looking for order flow.
A pullback from this level, may attract more buyers, but the risk is the majority of buyers have already bought in. Sellers push through the 9300 level where position and swing traders cut their positions increasing selling pressure and we take out the lower end of the range and push into the low to mid 8k area. That is the risk for longs here.
However, there is also a lot of sellers in this area and if momentum can push through this resistance zone and take out the 11,300 level, we could easily see a spike into the 12-13k area. This is the risks of shorting the potential lower high here.
The key level is 10k for longs, as if this gives way the likely hood of taking out the lower support area increases.
There is nothing to do but let the market play out here. Well there is one thing, do you have a plan for either way the market swings? IF not then you are reacting to the market and not planning to act. We have a plan to position regardless of how the market reacts.
As for the alt coin market it is relatively weak and this is not a market we are interested in until the structure improves.
In the end there are no secret levels, or magical indicators that are going to predict the next move. All we can do is prepare for either scenario based on previous levels of order flow. The challenge is most are looking for Unicorns and fall prey to bull market gurus that are taking them down a rabbit hole of alts and the Bermuda triangle where money disappears.
Anyone pushing alts here needs to have their head checked, or needs to learn to read a chart. Though many started the year off strong like Litecoin and EOS, they have quickly shown how vulnerable and weak they are to corrections and consolidations. While Bitcoin is trading horizontal, they are continuing lower.
How are those TRX bags working? Do you really think XRP is going to go to $50 let alone $200. If it hits $50 it will be over half the value of the entire Gold market. Yeah that's a great probability.
Focus on the chart showing relative strength, and stop buying the crap that looks like S@$!. Yes they can swing lower and if Bitcoin pulls back do you think they will buck the trend? If you do I have a flock of Unicorns for sale with secret feed to make them poop Gold, drop me a line.
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