BTCUSD - A wall of resistance gradually being knocked down?
已更新
For those of you following, I'm long ETH and BTC and sitting on some cash, waiting for the right opportunity to buy in more. I think we could be in a 1-5 impulse wave back up and so I am trying to find localised trades that allow me to buy in with a local target profit which I could then choose to leave go if the price action looks good. I am also mindful that we could instead be in an A leg of ABC retrace which could see us go down to 6k again. If this looks like it will materialise, I would sell some of the BTC I bought from the bottom with the aim to buy back lower. In my opinion, providing we do not go much higher from here, a 6k retrace would be good news for the bulls in the medium term as it would establish the bottom and allow more traders to come into the market. However, this does not mean it is going to happen and the last 24 have reduced the likelihood of this happening.
Why is there a reduced chance of 6k?
- The meeting of the 1HR and 4HR 50EMA provided a great opportunity for the bears to reassert their dominance. BTC attempted to break this down on several occasions but was unsuccessful, posting several higher lows in its attempt. As this post will show, I was ready here with my finger on the sell button. We instead formed a small H&S formation with a break out up.
- That breakout came at a key area. There is a diagonal down trendline formed way back from the start of Bear Wave 2 (16k) and Bear Wave 4 (13k). This last break has taken us through this, although we need more time to pass to show that it has held. You'll note we attempted to break this on the 10 Feb and failed.
- *IF* the current price closes above 8,700 on the daily, we will have formed at higher low and higher high formation. This is a signal a lot of other cash holding traders are looking for. The cash holders would prefer a double bottom but there will be those now having FOMO. You'll note that all the way down from wave 2 we have only created this formation once on 26/27 Jan and it was much flatter on that occasion. The ideal scenario is if this closes above 9,100 (10 Feb high which was not maintained).
H&S to take us to
12K?
It looks like we are about to create the right shoulder of a reverse H&S formation. This could give us the impetus to create the impulse wave up through the resistance above. Based on it's height, the H&S target would be around12K, which is bang inline with the main diagonal trend line.
A wall of resistance
I have plotted the likely resistance areas on the chart, there's a lot of them and several areas where there is a convergence of resistance. The most notable being around 9.6k. 0.5Fib of Bear Wave 5, previous top of the final leg of BrW5 and the bottom of Bear Wave 3. Depending on when we get there, this could also coincide with another diagonal trend line formed since near the top of the bull run (removing spikes).
My plan
I'm now working on the basis that if the HL and HH formation close on the daily, we are bullish to 12k but mindful we could be heading for a Leg B down to 6k. I want to take some localised trades where I can see a clear target but I will adjust my risk reward ratio down so that I can put in deeper stop losses.
My next trade will be if we break this H&S neckline. I'll look for the break and then a retrace of the break. This retrace may come in a few hours or may take a couple of days. This is slightly risky as it may not retrace and so I might miss the opportunity but I'm content with that as it fits into the plan I am working to.
p.s. This post shows, I am way more bullish ETH medium term, but I find trading BTC easier in these corrections and will look to move over to ETH as prices stabilise.
Why is there a reduced chance of 6k?
- The meeting of the 1HR and 4HR 50EMA provided a great opportunity for the bears to reassert their dominance. BTC attempted to break this down on several occasions but was unsuccessful, posting several higher lows in its attempt. As this post will show, I was ready here with my finger on the sell button. We instead formed a small H&S formation with a break out up.
- That breakout came at a key area. There is a diagonal down trendline formed way back from the start of Bear Wave 2 (16k) and Bear Wave 4 (13k). This last break has taken us through this, although we need more time to pass to show that it has held. You'll note we attempted to break this on the 10 Feb and failed.
- *IF* the current price closes above 8,700 on the daily, we will have formed at higher low and higher high formation. This is a signal a lot of other cash holding traders are looking for. The cash holders would prefer a double bottom but there will be those now having FOMO. You'll note that all the way down from wave 2 we have only created this formation once on 26/27 Jan and it was much flatter on that occasion. The ideal scenario is if this closes above 9,100 (10 Feb high which was not maintained).
H&S to take us to
12K?It looks like we are about to create the right shoulder of a reverse H&S formation. This could give us the impetus to create the impulse wave up through the resistance above. Based on it's height, the H&S target would be around
12K, which is bang inline with the main diagonal trend line.A wall of resistance
I have plotted the likely resistance areas on the chart, there's a lot of them and several areas where there is a convergence of resistance. The most notable being around 9.6k. 0.5Fib of Bear Wave 5, previous top of the final leg of BrW5 and the bottom of Bear Wave 3. Depending on when we get there, this could also coincide with another diagonal trend line formed since near the top of the bull run (removing spikes).
My plan
I'm now working on the basis that if the HL and HH formation close on the daily, we are bullish to 12k but mindful we could be heading for a Leg B down to 6k. I want to take some localised trades where I can see a clear target but I will adjust my risk reward ratio down so that I can put in deeper stop losses.
My next trade will be if we break this H&S neckline. I'll look for the break and then a retrace of the break. This retrace may come in a few hours or may take a couple of days. This is slightly risky as it may not retrace and so I might miss the opportunity but I'm content with that as it fits into the plan I am working to.
p.s. This post shows, I am way more bullish ETH medium term, but I find trading BTC easier in these corrections and will look to move over to ETH as prices stabilise.
注释
Zoomed out view so you can see where the diagonal resistance lines are coming from注释
I would want to see at least a 4 hour close above the H&S neckline to say it has been breached....注释
Looking stronger as we have had a 4HR close above neckline, but I am seeing RSI divergence on 30 mins. I'm set up to go long with a good risk reward ratio. I want to see a retest and bounce from the neckline or this current 30 min bar to cancel the RSI divergence. 交易开始
Position sizing: SmallEntry: 8,856
Stop Loss : 7,730
Target: 12,000
注释
Further updates to this trade will be posted here:
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