Bitcoin: Bullish Back To 64K?

9월 15일

Bitcoin has rallied off the 53K support area as anticipated (read my previous article). I even explained my dollar cost averaging strategy particularly for this situation in my previous stream. If 60K is cleared, the next resistance is 64K. The current momentum is now bullish which can be confirmed by the higher low pin bar over the previous week (see arrow). Since higher lows often lead to higher highs, a break of 60K and test of 64K is within reason for the coming week. How you go about using this information all depends on what type of risk you are willing to take.

As I demonstrate each week, the time frame you choose is a function of market risk. Smaller time frame strategies like day trades will be associated with much smaller risk (tighter stop) compared to larger time frames like swing and/or position trades. Since the scope of my analysis here is the swing trade time frame, I will explain how best to utilize this information respectively.

With the bullish structure as a reference, and bearish inside bar present (previous candle) a minor retrace is likely to follow into a test of support (55 to 56K area) before the next leg higher commences (see illustration). The retrace is NOT guaranteed, but would present an ideal setup IF the scenario were to unfold over the next few days. Price can also just take out the inside bar high (continuation pattern) which can also justify a swing trade position (higher risk).

Either way, probability favors a test of 64K UNLESS the low of the higher low structure is cleared. This means support levels are more likely to present reversal opportunities (especially on smaller time frames) while resistances are more likely to be broken. Keep in mind this is NOT about "knowing the future", it is about selecting a likely scenario from a range of scenarios and then adjusting to whichever path the MARKET chooses.

If the inside bar high is broken instead, risk can be defined by the current candle low upon the close of the candle. Profit potential can be measure by the 64K area which means 4K points is within reason. Ideally risk should be less than half this amount, but no more than the amount of the profit objective (1:1 reward/risk). Can 64K be cleared as well? Anything is possible, but it is better to keep expectations within reason and ADJUST if price decides to go further.

The mistake to avoid is the hype that comes along with a move. "Why" does not matter because by the time you learn "why" a move is occurring, the reason is no longer the catalyst behind the move. Focus on the price structure and the support/resistance levels and you will be ahead of most of the retail trader/investor population. If you are unable to judge the quality of information that you consume, then you will most likely become a profit opportunity for someone who can.

Thank you for considering my analysis and perspective.