I have been mentioning it more and more in my previous BTC reports, this is a day trading environment. Why? You can find signals on smaller time frames, capture 50 to 100 points within an hour, and get out for relatively lower risk. That cannot be done on the swing trade time frame because the risk is enormous.
Think about this for a moment: No one knows where the high will be. No analysis, indicator or technique will ever forecast the high or low especially on a large magnitude with any degree of consistency. What if you were the trader who bought at 7200 thinking this thing is going to 8k and watching it sink to 6765 over the next couple of hours? Based on the price extension projected from the 5365 low, 7154 is the 1.618 target which again only serves as an estimate. The fact that price went above and back below this level in a matter of hours is certainly something to note.
Nothing goes up in a straight line. People who are new to this do not understand the risk of retracing increases, the higher the market goes. At the moment, the first retrace level that IF reached would be perfectly reasonable is 6465 which is the .382 of the recent structure coming from the 5114 low. That is where I would be interested in looking for an entry. If that level happens to break, the next level is 5705 which is the .382 of the entire structure. This level also happens to overlap the .618 of the recent swing which is 5920 to 5520 area. These are the levels that offer more attractive reward/risk compared to where price is now in terms of swing trades.
Not to mention, the wave count is clearly within a 5 of 5, and extensions and extreme sentiment often occur on this wave. Yet another reason to not take any swing or position trades at these levels. This is why day trading has a purpose, but also requires experience. Without a well defined structure, your expectations will be unreasonable which will set you up for naturally taking risks that are not proportionate to that time frame. So if you are newer, my recommendation is stay out, or find another market.
At the moment, it is easy to get consumed by all the hype and media attention and rocket paintings because it appeals to our greed and fear of missing out further. A lesson I learned a long time ago is that when things in the market look their best, that is usually the worst time to buy, and when things look their worst, that is usually the best time to buy. This market looks poised to go to 8k. This is why I will NOT touch it, not even with borrowed money.
In summary, this market is impressive, and could possibly be driven by the expectations of "free money" in the upcoming Segwit2X. Either way, it is not a market that offers attractive reward/risk and does not meet the criteria of MY swing trade plan. Like everything else, it will retrace, but when? It can happen any time, and if I am going to do anything in this market, I would rather wait until one of my retrace prices are reached at least. If you are looking for action, look to the smaller time frames if you have the experience and well defined plan. Better opportunities in these markets are not finite, there is no need to chase, it is just a matter of waiting it out.
Comments and question welcome.