Bitcoin Bull Profit Taking - Top of Trading Range 60/40 market
Bitcoin is in the midst of a developing trading range. Despite what many hope to be the start of a strong bull rally - it is necessary to view what is happening, without biases, hopes and desires.
In my last analysis post of bitcoin I talked about bull profit taking. Last week the bears created a strong bear bar and sell setup for a failed bull breakout and second entry at the top of a developing trading range. The bears currently have a 60% probability of lower prices. There is only a 40% chance of a strong bull breakout and higher prices without a correction and higher low first.
Although the bulls have been strong recently, prices are still within a trading range (look to the left), and not in a strong bull trend with breakouts to new highs and higher lows. This increases the probability that this rally is more likely a bull leg in a trading range than a bull leg in a strong bull trend. This means the current rally is more likely a buy vacuum, and not strong buying pressure. This week the bears filled the most recent bull gap around 9300, which makes it more likely a buy climax and not a measuring gap.
However, the bulls will likely attempt to form a higher low and larger second leg up after a test down. If they are able to keep some of the gaps open below, they will increase the probability of another leg up to 60%. If instead, all the gaps are filled, prices will remain range bound and in a 50/50 market, with legs both up and down and no clear direction.
If you found this helpful please like! Feel free to comment or ask questions.
See more at my website on how to learn to identify probabilities, create an edge, and develop your traders mentality.
In my last analysis post of bitcoin I talked about bull profit taking. Last week the bears created a strong bear bar and sell setup for a failed bull breakout and second entry at the top of a developing trading range. The bears currently have a 60% probability of lower prices. There is only a 40% chance of a strong bull breakout and higher prices without a correction and higher low first.
Although the bulls have been strong recently, prices are still within a trading range (look to the left), and not in a strong bull trend with breakouts to new highs and higher lows. This increases the probability that this rally is more likely a bull leg in a trading range than a bull leg in a strong bull trend. This means the current rally is more likely a buy vacuum, and not strong buying pressure. This week the bears filled the most recent bull gap around 9300, which makes it more likely a buy climax and not a measuring gap.
However, the bulls will likely attempt to form a higher low and larger second leg up after a test down. If they are able to keep some of the gaps open below, they will increase the probability of another leg up to 60%. If instead, all the gaps are filled, prices will remain range bound and in a 50/50 market, with legs both up and down and no clear direction.
If you found this helpful please like! Feel free to comment or ask questions.
See more at my website on how to learn to identify probabilities, create an edge, and develop your traders mentality.
