I went long between $7,600 - $7,650 before the lower low of 7,400 today. My methodology was to give the RSI some time to reset (it did - 24 to now 36) and also to show respect to the $7,600 support. I have since sold off those coins for a small scalp.
I now think the first relief rally (higher highs, higher lows, mediocre, but respectable vol) had a better chance at breaking out of the short-term downtrend. But it didn't. We saw lower lows, and bounced at $7,400.
As a momentum trader, I value volume hugely. This bounce had very, very little volume. I now believe it was a bull trap and that we will continue the downtrend to retest $7,600 as well as $7,400 again. I believe we will stay in this descending channel, and eventually break to the downside.
A test of $7,200 is now on the board in my eyes.
I now think the first relief rally (higher highs, higher lows, mediocre, but respectable vol) had a better chance at breaking out of the short-term downtrend. But it didn't. We saw lower lows, and bounced at $7,400.
As a momentum trader, I value volume hugely. This bounce had very, very little volume. I now believe it was a bull trap and that we will continue the downtrend to retest $7,600 as well as $7,400 again. I believe we will stay in this descending channel, and eventually break to the downside.
A test of $7,200 is now on the board in my eyes.