Bitcoin Bears Where Are You? Price Lingering At Resistance?

5 thg 4, 2020

#Bitcoin has been lingering at the current resistance level for a few days now, meanwhile markets that are weak do not linger, they sell off FAST. So what does this price action imply? In this brief video I explain what we expect from Bitcoin over the next week based on the clues offered by the current balance of order flow. We operate a LONG only swing trade strategy and have been in a position since the buy signal in the mid 5700s.

1. Since Friday there have been signs of bearish activity in the form of a bearish pin bar, followed by some inside bars. This configuration, relative to its location is setting up for a sell signal BUT it needs to confirm and that requires a close below 6425.

2. IF a sell signal asserts itself, that does not mean we react. The price structure that has developed since the 3800 low has maintained it's bullish integrity which for us means we hold our swing trade long and let the market play out. Often taking no action is the best action because in this game human nature tends to only get in the way. We have a stop in place, and we usually leave it up to the market to decide the outcome of our trade idea.

3. IF the sell signal confirms, what kind of retrace is within reason? The key resistance in play at the moment is the 7300 to 8K area, which favors selling activity. The fact that price is lingering nearby rather than selling off is conflicting to say the least, and can only be interpreted as a sign of hidden strength. IF the selling activity returns, we are still looking at the 5700 and 4800 supports as higher probability locations for bullish reversals. Also relative to the current bullish structure (3800 to 7200), pushing to a new swing low (below 3800) is a low probability scenario.

Effective timing comes with the acceptance that ALL financial markets contain a HIGH degree of randomness. Logic will NOT give you any control or advantage in such an environment. All the news, opinions and analysis in the world will not help you if you cannot filter that information into a coherent and repetitive decision making process that accounts for the forces natural to any market. It begins with price action and order flow.