Selling Into Greed - Let's Do It Again! (BTC)

This time I really did sell, and I entered a small short at $39320, with a stop loss at $40300. In my last Bitcoin short idea, there was no bull market, and I was still waiting to accrue some profits in my crypto portfolio. Now that I've reached my first milestone, I just exited some of my spot crypto positions to reclaim my initial investment. The rest will be house money used for trading and for long term profits. This is how I'm approaching it. I think it's very important to develop a plan before investing, and my goal was to reach a certain profit threshold and take back my initial. Everyone's risk tolerance is different. I'm a guy without a huge income, currently in grad school. it makes sense for me to have some extra cash on hand. It really depends on your unique financial situation.

Sure, prices could continue up from here, but I think there's a decent probability we see some lower prices in the not so distant future. And if prices do drop substantially, I'll have more purchasing power. Bitcoin hasn't been able to break above the long term channel (light blue). I think at the very least, it can touch the channel support again. if that falls, lower targets are shown as red X's. I used this same chart to call the top in June 2019 (look at the yellow arrow).

The BLX chart shows that Bitcoin is also inching closer to the long term curved resistance. If it continues up from here, I think price could find short term resistance there, and it's currently int he mid-$60k region:

Zoomed out:

Zoomed further out, you can see where the light blue originates:

Interestingly, Bitcoin is touching the curved resistance on this chart I posted back in March, where I did actually call for $40k:

Since then, I adjusted the curve, but this is just another reason for me to feel cautious here.

Of course, it can break the resistance eventually, but I'm trying to think rationally here. This idea is about being rational and dampening greed.

Bitcoin loves double-tops. This recent top is a bit too pointy for it to look like it will result in one of my curved continuation patterns:

Here is my original post about Bitcoin's tops versus consolidation periods:

If it drops, where will it bounce? Well, historically the 100d MA has provided very strong support during a parabolic bull run. That's where the market found support in September, and where it could bounce hard if Bitcoin tops here. It's currently around 20k, but I suspect prices might dip briefly below there if this sort of drop occurs. Many are not expecting this to happen.

Here's where I wrote about the 100d MA in August, and it ended up playing out perfectly. Target was reached, and I finally took some risk out of this ridiculous market.

Here's the original analysis:

Everyone seems to be buying stocks and/or crypto right now. This is just my hedge in case things fall apart quickly. We're in uncharted territory in terms of USD devaluation and money printing, but there can be a point where the absurd amount of debt in existence causes a spike in the demand for real cash. Additionally, the USD is actually finding stronger support than it has in the past, at the 89 level. It has also broken a long term downtrend and held it as support! This tells me there is at least a slim possibility the asset bubble pops soon. Just as with COVID, anything can trigger it. The market is a house of cards. I still think we're overdue for a 1929-style market crash.

DXY:

This is not financial advice! This is for speculative and entertainment purposes only. These are only my thoughts and opinions.

-Victor Cobra

评论:

I apologize for this post being a little disorganized. Some of the charts I shared weren't really in the right order - for instance, for instance the original "Selling into Greed" post.
Anyway, I lowered the stop on the short loss for less risk. Closer to break-even now.

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I think if Bitcoin can head convincingly back to 40k, particularly if alts hold on their ratios, we can get another big move to the upside. My rationale for taking some out of the market is just to stick to my plan. I still have much higher targets for the cryptocurrencies I own.

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Stop moved to in profit. This top is starting to look a little more convincing, but just in case, I want to keep my stop somewhat wide in the event of a short squeeze. Still looking for some lower levels to be tested for liquidity sub $30k. We'll see if it happens.

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For bullish consolidation, I think BTC needs to make a slightly higher high soon before continuing to correct. If this happens, the deeper correction idea might be invalidated. For the bearish scenario, Bitcoin needs to break down from this recently formed uptrend.

交易手动结束:

While funding is telling me this could still drop heavily any moment and squeeze shorts, price action is looking bullish. Closed the short for profit here. Going to wait for more momentum. Still holding the support and ETH is rallying.

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If Bitcoin can break this downtrend, I think it can move on to form bullish consolidation, with a slightly new local high near 43k. The next local peak will tell me where to draw the curved resistance. If Bitcoin fails here (Which it easily could with such high funding rates), it can be a sign of buyer exhaustion and a more obvious medium-term top.

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I'll just say something here: a lot of people who post on TradingView will give an idea, back it up with little analysis, and then fail to update if price action doesn't follow their prediction. Most don't even post whether or not they have a position! I think it's really important, if you're actually trading this market, to be constantly re-evaluating and exercising risk-management. Most people don't teach you that.

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Edit: "While funding is telling me this could still drop heavily any moment and squeeze shorts" should be ***squeeze LONGS

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Well, it's looking like it may want to drop further, as per the original idea in this analysis. Still a little hard to say - it needs to break down with high volume below 32k to confirm a medium term reversal. I think this should be the last chance for a bounce opportunity from the 34k level to break the recent high (even if it's only a slightly higher high).

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Based on current price action and bubbly sentiment from alts and markets in general, I think there's a decent possibility Bitcoin dumps towards my next two targets relatively soon. Unless Bitcoin can break and hold above 34k and then 36k, I don't see this making any big moves to the upside.

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Well, BTC broke above 34k and 36k to boot. So as long as it doesn't return below those levels, it can prepare to take out the recent highs. The bubbly sentiment surely hasn't evaporated, and it could take some more months of mania before things finally cool off for a while. Let's see what happens!

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As per my last update, BItcoin has taken out the recent highs. The next chance for a "short" setup will be once it reaches the log growth curve, currently around $69k. If Bitcoin gets rejected from here and falls back below 36k, that would bring back the more bearish options from this analysis.

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Zoomed out on the monthly:

You can also see that Bitcoin always tested the 9 month EMA (orange) during bull market corrections. So this move is still over-extended, and represents more bubbly growth than healthy growth. I expect that EMA to be tested eventually during this bull market, and it could be violent. It's at $23150 at the moment. So the next correction could easily b 40% or more.