Bitcoin: Waiting For A New Buy SignalSince the retrace from the low 60K resistance area, Bitcoin has been slow to develop any compelling signals that call for a new swing trade long. It can be very confusing while it gyrates between 57K and 50K, especially if you spend too much time watching smaller time frames.
At this time, 50K is still the key support that is in play. That means it is still very possible for a retest of this area, followed by a bullish reversal. That is the scenario we are waiting for because it offers the best reward/risk along a greater population of participants looking to buy. How do we know? The initial test of the 50K area support didn’t even touch 50K, which can be interpreted as plentiful buying activity (see recent candle stick tail).
IF price manages to make the slight lower low, the mistake to avoid is to step into it too early. It can be very tempting, but waiting for confirmation (a bullish reversal pattern), helps to minimize getting caught in a support break or dramatic sell off. The trade off is you will not enter at the best possible price, but the good news is you don’t need to. Momentum on your side more than makes up for having the best price. Don’t seek perfection in an arena where it doesn’t exist.
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So we WAIT. No predictions, no hunches, no opinions. Bitcoin either aligns with the strategy, or we don’t assume any risk. As many “gurus” will not tell you (because they are too busy putting out “action”), high quality opportunities and setups are infrequent and RARE. Over a one month period we have only been seeing maybe 2 or 3 at most in recent months on the swing trade time frame. That translates to maybe 1 per week. More trades than that? You are either over trading or day trading.
IF the 50K support breaks, it can lead to a test of the 48K to 45K area quickly. This scenario will also put a lot of pressure on many of the overly hyped alt coins as well. Keep in mind, risk should be your first priority, not profits. With this philosophy in mind, if 50K breaks, and you have a lot of exposure to alts, it may be a good idea to lighten up even if it means absorbing a smaller loss along the way. Going into “HOPE MODE” is not a strategy, nor is it healthy for your account over the long run. Hype and the herd mentality have been at euphoric levels recently, and when the space goes out of favor, many will be stuck in coins that are not worth anything even close to what they paid for them.
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