BTCUSD update: Hanging on all time highs of 9400 as I write this. The spot light has switched from ETH back to BTC. Are these markets going up forever? Not in a straight line. This price action is euphoric and is a great place to lock in profit, but not to initiate new positions, even in the face of a 10k possibility. I will explain why.
It appears that the news that is driving this market is somewhat significant, like more governments adapting blockchain, etc, and that is great for the future of this technology in general. The problem is, as many newer traders do not realize, this rate of change is abnormal and unsustainable. The strength is clear and cannot be ignored, but my point is: do not get used to this. Stocks like Yahoo and AOL (when AOL was just AOL) also used to go up 100 points a day, and moved like that for about a year (back in 1999), and today they make headlines if they move 1 point. (I realize BTC is not a stock, but I am just illustrating a point).
I make this point not to elicit more fear of missing out, but instead to provide a perspective to better manage expectations as this market matures and faces many changes like the upcoming futures contract, real institutional competition and regulation. The less experienced do not understand, institutional players have better information, much deeper pockets and can hire the best talent. They are smart money, and they are not entering this market to help the little guy. Be prepared for harder markets, especially on smaller time frames. One other point to keep in mind also is that a large number of U.S. investors are prevented from shorting these markets. Exchange platforms like GDAX (Coinbase) do not allow margin accounts for retail investors in the U.S. (I can't day trade this market short, even if I wanted to.) The futures market will not have such restrictions. That may help explain to some degree the imbalance in these markets as well.
As of now, there are no signs of weakness. Higher highs, especially all time highs often signal further strength. I keep reading comments about people selling all their coins and feeling bad because the market is higher. Selling the top and buying the bottom are like hitting the lottery, low probability. Thinking that you are entitled to selling the top is like thinking you should win the lottery because you bought a ticket. As short term traders the goal is to achieve consistency in a way that is reasonable in terms of the risk we are willing to take. And repeat our process over and over. Not hit home runs.
My next target on this market is the 9600 area. It comes from two 2.618 extensions that are almost overlapping between 9470 and 9575 so I will estimate it slightly higher. These extensions are measured from the 7871 and 6185 lows respectively.
This is a great move if you are in. If you are not, then that's okay too. There is no need to get emotional. Even though I have a higher target projected and no weakness in sight, does not mean it can turn instantly without warning. That is why buying highs, especially in euphoric markets like this presents such a high risk. The market can keep going, but no one knows when it will turn. It is like a game of musical chairs (google it), if you are going to play, you better be quick to sit once the music stops.
In summary, I am not buying highs. And even if I could short, I would not because I do not short strong markets. My plan forces me to wait for a sensible retrace which is elusive, but it will eventually present itself. 8825 is the closest support (.382 measured from the 7871 low). The next support after that is 7885 area which is the .382 measured from the 5400 low and a previous resistance. The best I can do is wait and see if price produces a reversal formation on a smaller time frame at one of these levels for a possible swing trade with risk that is sensible for MY plan. Otherwise I stay flat.
Thank You for your voice of reason. Trying to keep your subscribers from losing their heads in a runaway market is so tough. I have traded the markets for 35 years . I have traded at the board of trade commodities and financials . I have traded in the pits and up stairs. The advice you are getting from MarcP is sound . If learned well can pay you for many years to come,. Please traders be patient there are hundreds of good trades coming wait for high probability times and you will truly get paid. There are no home runs here just good process and discipline in trading. If you just want to hold Bitcoin that is different than trading . Then go to the school of emotion and buy small amounts when your feelings are strong but try to form an exit strategy for what is enough either time ( I am going to hold till march 28 2025 or price ( I am going to see at 15000 0r 50000 ) and you could be happy. I have to tell you this reminds me when I was trading the Nikkei Index . It had just started and what most people didn't know was that the Japanese had no way to short the market . I was considered by the country as patriotic to invest in Japanese companies. The Nikkei was a runaway market at one time at it's highs the Nikkei and Real Estate of Tokyo was worth more than all of the United States real state and markets. They were even doing 150 year mortgages on their grandchildren for property. Hard to believe now but true .
Then someone got them to allow futures on there markets. In a matter of months the Nikkei crumbled. Imagine the Japanese were totally unprepared for waves of hedged baskets of stocks being shorted created by futures. People disgraced . Suicides Families whom invested for 30 or forty years every week since the end of the war to see their profits disappear in a matter of weeks and months . Japan truly never recovered to this day.
I say this to you please learn to taked profits in strong markets . You will never go broke taking profits. Bless you guys and good luck
If anything I have said helps keep it it was for you If it doesn't work for you throw it away I am not here to be right I just want to do what works.
Happy Bitcoin ing.
BBD
goldbug1
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Well said Marc! Couldn't agree more.
jack88p
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the music will stop soon
Silver-Collector
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" I keep reading comments about people selling all their coins and feeling bad because the market is higher. Selling the top and buying the bottom are like hitting the lottery, low probability. Thinking that you are entitled to selling the top is like thinking you should win the lottery because you bought a ticket."
Best Advice I've seen on TV.
Soulace
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Thank you, I just discovered you recently and love how detailed and story telling you get. Really opens up perspective. Thanks again !
devilninja777
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We're blasting though 10K son, get ready for the biggest weekly ever seen
silmaril0875
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One thing that I keep on asking and no one seems to be able to provide any answer is that the previous drops was based on false information about BTC being banned,etc, but now we have no false information so what makes us think BTC should retrace if we have no negative fuel to do so?
getbits
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@silmaril0875, Exactly. Everyone keeps calling for retrace but this market is not indicating that at all. Quite the opposite in fact.
ahmad0
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@silmaril0875, because this is how the market works from day1 of market creation in human history.we must have correction.we dont need any negetive news for that.it is basic things about supply and demand. basic economy lessons.
Any market must have correction but no one can predict that exactly
and dear friend if you don't know this things avoid trading because its dangerous for even highly exprience traders.it's just friendly advise
silmaril0875
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@ahmad0, I fully understand the basics of trading but this BTC coin does not behave like anything we've seen before. it's 24/7 trading and pushed by multiple countries which means it has it's own cycles and from what I see it's not going to stop of pullback anytime soon. All the previous corrections were driven by negative news... Show me one correction without negative news and I'll agree with you...
Then someone got them to allow futures on there markets. In a matter of months the Nikkei crumbled. Imagine the Japanese were totally unprepared for waves of hedged baskets of stocks being shorted created by futures. People disgraced . Suicides Families whom invested for 30 or forty years every week since the end of the war to see their profits disappear in a matter of weeks and months . Japan truly never recovered to this day.
I say this to you please learn to taked profits in strong markets . You will never go broke taking profits. Bless you guys and good luck
If anything I have said helps keep it it was for you If it doesn't work for you throw it away I am not here to be right I just want to do what works.
Happy Bitcoin ing.
BBD