BTCUSD: Going To New Lows? Or Great Place To Buy More?

BTCUSD update: Price could not push through minor resistance of the 11871 to 12316 area and appears to be getting weaker once again following the establishment of yet another lower high. The price action is weak, BUT it must be considered in light of its location within the bigger picture. As long as it stays within this generally supportive area, minor pullbacks are potential buying opportunities from the larger time frame perspective.

When utilizing TA, it is not just about evaluating the most current price action that is unfolding for patterns and levels. It is also about considering that price action in light of the bigger picture. Many less experienced traders forget that part, and get sucked into misleading signals as a result. The other factor that must always be considered before assembling a scenario for a trade is the time horizon, day? swing? position trade? because that also affects what information carries more weight.

At the moment, the small picture shows a lower high off of a minor resistance area of 11871 to 12316 (.618 of recent bearish swing) and a possible triangle break to the bearish side. Isn't this a short setup? Sure, IF you are day trading, because this setup is occurring right into a major support zone that has not been compromised yet.

I am observing this market from the position trade perspective which means I am interested in broader structures and levels, like the 10534 to 8656 support zone (.618 of recent bullish structure). For me, the fact that price is still fluctuating in this area and not pushing below levels such as 9683 (written about in previous reports) means that it is not as weak as the immediate price action implies. For this reason, I am anticipating a bullish reversal within the support zone and a break of the 11871 to 12316 area rather than a retest of 8K.

Now keep in mind, I could be wrong. I have been doing this long enough to know that the market is always right. The best I can do is interpret price action, make comparisons, develop scenarios and then see which path the market chooses. My thoughts, feelings and opinions are irrelevant. This is why managing risk is more important than being "right" as so many less experienced participants naturally value more. So with that being said, IF this market does not show any reversal signs and pushes below the 8656 area with conviction, I will just hold my position trade and wait until the market finds stability before doing anything else. Since I am in this for the bigger picture, my carefully managed size keeps me out of trouble.

In summary, react less and compare more. Know what time frame you are looking to take risk on and weight information from there. For me, the big picture is in a descending wedge and forming a broad higher low, it is just a matter of catalyst before the next rally structure begins. I watched this market go to 1K back in 2013, and then pullback for 2 YEARS before it entered into the bull market that we saw more recently. As long as the general fundamentals of this space stay intact, I prefer to buy more, especially upon bullish reversal patterns within broad support zones. This is my perspective because I am in a position trade which aims to capture much broader market moves.

Questions and comments welcome.