Long term view of < $5k unchanged

Long term view of < $5k unchanged

Just got back from my trip to Toronto, Taiwan, Hong Kong and Macao! Another item ticked from my bucket list. If you have not been to Toronto before, it’s a must-see destination. Truly amazing. Did you know that the scene where Leonardo             DiCaprio got arrested in the movie “Catch me if you can” was filmed in Montreal? I always thought the scene was filmed in France.

Now, let’s get back to bitcoin             . After an extended period of consolidation, bitcoin             has finally broken down of the $5800 support. If you still remembered, my very first target from early this year was around the $4400 level. Since then, with the emergence of more patterns/data/candles/price actions/different indicators, I have updated you with my thoughts that bitcoin             is possible to visit $4980, $3800 and even $2950 in the upcoming future.

Although my ultimate target have always been below $5000, I have been day/swing trading bitcoin             in the past few months simply by buying at good support levels. The end results were that I made 3 consecutive successful trades (You can refer to my previous TAs below in which I have given you the exact buy-ins as well as the reasons for taking the trades).

I can see many experts were calling $5800 as the bottom and that the institutional players were accumulating – it’s simply not the case. First, bitcoin             is still in a bear market. There is absolutely no sign of reversal – there were no double bottom and no creation of a higher-high. Trying to buy the dip and hold without signs of reversal is simply gambling. (It’s a different story if you are day/swing trade or scalping) Further, in a bear market like this, the retracement from the all-time-high is often 78.6% or more, which is at around $4400 (I have done a TA about this back in April 2018). Plus, the weekly EMA200 has not even been tested yet, which is also at the $4400 level. In addition, if you look at the structure around Oct 2017, $5800 is just not a critical support level in my opinion. A critical support is usually a flipping level (which used to be resistance but then became support – $4980 & $2954 are both flipping levels), or a neckline of a double bottom…etc.

What’s going to happen now?
At the moment, many people are trying to buy the dip as they think after a huge breakdown there must be some kind of relieve (retracement). I admire these people as either they are brave or they really know what they are doing. To me, I just don’t think that bitcoin             is going to drop by only 10% after breakdown of a 9 months descending triangle .
In my opinion, I think the more likely scenario is bitcoin             is going to test the $4980 support and IF (a big IF) it holds temporarily, then bitcoin             may go up and retest the bottom of the descending triangle at around $5800. But if $4980 does not hold, look for the price action around $4337, $3676, $2954 and $2403.

How would I trade?
There are only a couple of scenarios that I would consider to “position trade” into BTC             if:
1. A double bottom is created in the range of $3676 – $4337, or in the range of $2000 – $2954.
2. A V-shape reversal that pierced through the $4k support, touch the $3k support and then quickly reverse and break above $4k, weekly EMA200 as well as top of the falling wedge , and preferably retest weekly EMA200 as support.
In other words, I will more than likely not to be able to buy at the very bottom. However, the chance of me making profits from these trades have increased by at least 50%+.

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Taiwan Bear

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Published at Mon, 19 Nov 2018 11:13:30 +0000