Bitcoin: Playing 35K to 38K Range.

26. Nov. 2023

Bitcoin range is confirmed between 35K and 38K (see blue rectangles on chart). As I went over in my previous article and stream, assign probabilities to these levels UNTIL one of them breaks. Since the broader trend (price structure) is still BULLISH, the resistance area (38K to 40K) is favored to break while the 35K support is more likely to hold. Using these expectations is like assigning loose probabilities to the levels which can adequately prepare you for potential opportunities while mitigating risk.

The purpose of this article is to provide insight and perspective into the scenario that I believe is most probable for the coming week or two. It is based on my evaluation process which is focused purely on price action principles. I am not always right, nor do I expect to be because first and foremost I accept markets are mostly random (not ALWAYS random).

Capitalizing on the current range is easier said than done mostly because of lack of perspective, poorly defined system, emotional baggage, etc. Just as a side note, I asked my followers in my previous stream how they would trade around this particular scenario. They all answered it correctly (they've been following me for a while).

Here is what I suggest: If you are AGGRESSIVE: day trade shorts off the resistance. Right now 37,200 is the short entry on the daily time frame. This can be used on smaller time frames as a point of reference for day trades. "Why?" you ask? Day trades keep your risk smaller because your stop and take profit should be proportionally smaller (lower expectations). For example, if you sell 37,200 you should be looking for a move to 37K or maybe 36,950 max. If you expect more, you are asking for trouble. This is a broader BULLISH trend remember?

If you are conservative: WAIT for a test of 35K and then look for a bullish reversal confirmation on the daily time frame. Since this would be a trade on the side of the trend, it would be reasonable to have a higher profit expectation. A swing trade would be more appropriate here with a profit expectation of about 1500 to 2K points. Again, WAITING for confirmation is KEY. If 35K breaks, then you need to reevaluate and adjust to the new information.

Keep in mind, the scenarios I am describing here are one of countless possibilities. Price may not touch the 35K area. Price may reverse off of 37K and break out. Or maybe the 35K support breaks and the structure changes. The idea is NOT to get married to a scenario but instead be prepared IF one appears otherwise you adjust expectations.

The human element of markets is what contributes to its repetitive tendencies. These tendencies are frequent but NOT constant. As a trader it is in your best interest to WAIT until probabilities are stacked in your favor, otherwise you are simply gambling. It's like playing lousy poker hands over and over and making the other players at your table rich.

Thank you for considering my analysis and perspective.