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Bitcoin Supports For Potential Longs

By:
Marc Principato
Updated: Dec 1, 2021, 08:17 UTC

The initial move off of the 53,500 recent low has lured many impatient longs a little too early

Bitcoin fxempire btc

While the broader trend is still bullish, the recent structure coming off the 69K high is bearish. In these situations I prefer even more confirmation before justifying any new risk. Here is what I’m looking for going into next week.

Setup 1:

the higher low formation. IF Bitcoin finds support somewhere between the 54 and 56K area, it would be in line to establish a higher low. Usually these formations lead to higher highs which would put price back into the low 60Ks at least. In order to confirm, a bullish reversal candle will have to close in the area, followed by a break of the high. Risk and reward can then be quantified and a new position justified.

Setup 2:

The double bottom formation. IF Bitcoin tests the 53K low AGAIN followed by a bullish reversal candle. As in the previous setup, this can be in the form of a inside bar, pin bar, outside bar, etc. This location offers a high probability of reversal AND an attractive reward/risk.

Keep in mind, that the corrective structure that is in play can also continue to break supports. IF 53,500 is cleared, the 50 to 48K area is likely to follow. While this would be within reason for small time frame bearish strategies, going for a short on the larger time frame is very high risk (you are shorting into high probability bullish reversal areas).

Novice traders usually get too caught up on smaller time frame information and miss the broader context. Having a clear set of rules that facilitate more of a market aligned view rather than an ego aligned view helps to avoid these common herd mentality mistakes.

If you would like to learn more about the long only swing trade strategy that I utilize for Bitcoin, please visit: https://greenbridgeinvesting.com/pricing

About the Author

Marc Principatocontributor

Marc has over twenty years of experience in the markets starting out as a Nasdaq day trader during the height of the dot com era.

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