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Marc Principato
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btc, bitcoin

Is this the norm? It is tough to define “norm” for Bitcoin, but none the less, the 51,300 entry price was taken out and Bitcoin has been gyrating around 54 to 55K ever since.

So if you missed this swing trade, what is the best way to adjust and prepare for the next buying opportunity? And why not buy it now?

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Let me answer the second question first: we don’t buy now for a swing trade because we don’t chase moves where the reward/risk is no longer attractive. It is that simple. If price continues higher from here, it does so without us because we focus on risk and sometimes that means letting a trade go. Effective risk management is what leads to consistency, NOT big wins.

As far as preparing for the next buying opportunity: IF Bitcoin can retrace to the 52500, to 53500 area and produce a bullish reversal, that would be a higher low. Risk can be clearly defined off of such a structure and we will be prompted to share a new swing trade long idea if the scenario materializes.

A more extreme bullish scenario would be a test of the 48K area a second time which would be a potential double bottom (similar to Gold off of 1675). IF a bullish reversal can materialize here, it would be an even more attractive swing trade long idea in terms of reward/risk.

It is also possible that Bitcoin gyrates within a very tight range around 55K for a few days while establishing a momentum continuation pattern to go higher. In this situation we will be open to taking on a new swing trade long, but it will be categorized as an aggressive trade since the location is less than ideal. In this scenario, at least there is a pattern to define risk from.

I just presented the main criteria that price needs to meet before we consider assuming any new risk. In other words, we take positions based on rules, not feelings, opinions or reactions to information. If Bitcoin does not align with the rules, whether it runs or not, we do not put on any new risk. Rules promote consistency.

If you would like to learn more about our analysis, perspective and signal service, visit here.

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