While my macro view of BTC remains bull, my short term view is very much bearish. I am still holding my short hedge position from 10.3K. Momentum on a weekly basis is still showing selling pressure. Thus, I'd like to trade to the down side.
Since BTC seems to be consolidating/breathing before continuing downwards, I'm expecting price to reach the red box. A mean reversion trade set up could then be executed as shown in the example. I like to use both current market volatility and S/R levels to place my stops. In this case, the stop loss is about 1x Daily ATR away from the highest candle body and right around the 9K psychological resistance level.
Since BTC seems to be consolidating/breathing before continuing downwards, I'm expecting price to reach the red box. A mean reversion trade set up could then be executed as shown in the example. I like to use both current market volatility and S/R levels to place my stops. In this case, the stop loss is about 1x Daily ATR away from the highest candle body and right around the 9K psychological resistance level.