My last update was done a little hasty while I was working, and the market started moving quickly. I was worried that we would see a downturn quickly like last time and wanted to get out a strategy if that were the case. This time, I want to go into more detail with what I am anticipating and how to trade in these markets.
There are a lot of mixed signals. Fundamentally, we have a favorable SEC hearing and at the same time China cracking down hard on cryptos. At the same time it's pretty clear that the technicals are throwing off signs of bottoming while still remaining in a downtrend. I would think this would make for a sideways market for a time while it tries to find direction.
You can see from our previous support points that we choose, the market has acted accordingly around them. My strategy in a potentially fierce bear market is to again employ the martingale buying technique. It ensures that we can be fairly resilient in any market. (please read on martingale strategies if you do not know them already)
The strategy is to buy at these points depending on where it goes. If the market breaks to the upside, we would buy at the blue support line on a retrace, 834 with a small percentage of the portfolio and sell once it hits the tops resistance line just below $1,000. Vice versa, if it breaks down, we would buy just above 730 and again above 600. The important thing is to keep enough money on the sidelines to buy more if we have a total break down and the market falls below 600. I would target 500, then 350 after that.
This is key. The goal isn't to be right. The goal is to make money and manage RISK. We don't care if the market goes up, or goes down. We pick our points and we go in strategically to eventually turn a profit.
These are my trades I do and not financial advice.