BTCUSD update: Minor retrace takes price back to the 11K area while an inside bar is unfolding at the moment. This could be the beginning of the higher low formation that can take price back up into the 15Ks.
Higher lows often lead to higher highs and are a general sign of strength. The formation at the moment is NOT an official higher low because the current candle is still open. IF this candle closes inside the range of the previous candle, it will be an inside bar. From there, IF price breaks above the inside bar high, I would consider that a trigger for a swing trade long. 10960 area can serve as a reference point for risk, while the first reasonable target is 14K. This puts reward/risk at around 2:1.
IF price closes weak and no inside bar is established, then I will be watching for price to stabilize around the 10534 to 9989 area. This area is the .618 minor support of the recent bullish swing, but what also makes it interesting is all the overlap. This minor support is within a broader .618 zone that is relevant to the bullish structure that lead to the 20K high. On top of that, just below this area is the 9683 reversal zone boundary which is measured from the 10988 low. What does all this mean? There is a better chance price finds stability somewhere near or within the 10988 to 8656 area. Good place to take profits on shorts if you are short, and to look for bigger picture longs such as position and swing trades.
Keep in mind this all dependent on the close of the current candle. At all times, many scenarios can unfold, but by limiting our scope to a smaller number of possibilities we gain the ability to make decisions that are more in line with what the market WANTS to do rather than what we want it to do.
As long as price stays above the 9683 area, there is a greater chance of a higher low, it is just a matter of WHERE the market chooses to establish the formation. Also the reason I am using 14K as an initial target is because it is just below the 14211 to 15525 resistance zone which is the .618 area of the recent bearish structure. I prefer to lock in some profits while I can, and below the proportional area where sell orders are more likely to accumulate.
In summary, navigating a trading market requires a well defined decision making process. Charts serve as a guide to evaluate possibilities and risk, but the key to utilizing them most effectively is to view them with a flexible mindset. There is no precision, only probabilities and estimates. This is why following an analytical framework and set of basic rules puts you steps ahead of the impulsive herd who continuously make and give back profits as they are driven to act by their greed and fear. We are obviously all in this to capitalize on opportunities, but in order to do that, the focus really should be on best practices rather than profits. Profits over time come as a derivative of quality decision making which is rooted by structure.
"Profits over time come as a derivative of quality decision making which is rooted by structure."
This should be in bold!
Aamir66
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Your approach and discipline is almost nonparallel. We constantly learn so much from your updates. thank you so much !
CryptoUnicorn17
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Can you refer to the future contracts ended just before the crash? banks tried to manipulate the market while shorting the bitcoin.
The next contract should end at Jan 26th and thus the bitcoin price is predicted to stay below 12K.
What do you think?
streamDr
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@yshkol, Spot on. That is exactly what I was going to request. Any details available regarding the current futures contracts in place is THE KEY information needed to assess where the pressure is being applied (and it IS being applied, these are not natural movements) and when it is likely to end. THAT would really help in any decision making and, crucially, timing. Thanks
Zendro
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When he says "this is all dependent on the close of the current candle," does he mean the daily?
chwi03
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@Zendro, This chart is a 12hr chart. I wish all traders would show the time frame on the chart, but one tip is that you can move your mouse from one candle to the next to see how much time is correlated to one candle.
bitc1
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@chwi03, An easy way just click on plus sign (+) on Top Left of the chart you will get all the details.
chwi03
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@bitc1, Thanks! I'd usually notice those things, but missed that.
yikumod
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you have helped me greatly thanks!
josephtse
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I think it's gonna double bottom at $9200. And please, zoom out a little more!!! You're not giving proper perspective. Bitcoin is still up like a 400 percent from 6 months ago. So still a lot of hot air left to deflate.
This should be in bold!