Bitcoin Break Out: Where’s The Follow through?Bitcoin pushed all time highs to 65K and is now showing signs of indecision. While there is no sell signal in place at the moment, here are some important considerations when it comes to judging momentum follow through.
Bitcoin pushed all time highs to 65K and is now showing signs of indecision. While there is no sell signal in place at the moment, here are some important considerations when it comes to judging momentum follow through. This is especially important if you bought into the recent break out.
The 61300 to 64250 area is another reversal zone relative to Bitcoin’s recent price structure. Price is now hesitating in this zone and a break of 61300 would constitute a new sell signal in terms of our swing trade strategy.
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This sell signal is not what you want to see develop after such a break out. It can be met with more dramatic selling pressure thanks to all of the new longs lured into the market during the break out.
The first support is now around the 58K area (where price spent a lot of time lingering), and the second support is still around the 50K area. The next resistance is still around 66K (which was almost reached in the recent break out).
It is also possible to see a trend continuation pattern develop over the next day or so IF the 61300 low is NOT taken out. In the current market environment, which has been lacking any significant retracements, this patterns have been very common. This would be a good sign if you are still long.
Break outs are tough trades to take because of their highly random nature. The key to making such a strategy work is to be able to exit the trade quickly if the break out turns out to be false. Many small losses can accumulate this way, but that idea is to catch the broader move when one follows through.
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Thank you for considering my analysis and perspective. I hope you find it helpful.
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