BITCOIN INDECISIVE PATTERN - WHERE ALL THE MONEY LOST!
Updated
Another day of the broad range consolidation, Bitcoin has undergone 57th day of trading since the previous high - 14,000 USD. You may wonder whether it is the right time to fill up your stack or expect Bitcoin to moon.
The answer is no ... YET. The market is consolidating and there is no clear sign that Bitcoin would elevate from here, YET.
Volume is weakening but we still see Bitcoin has been hovering above 9,500 - 10,000 USD. Interesting, right? The fact that Bitcoin hovers above this important support do not ensure that this level will hold. Indeed, there are two descending triangle scenarios that could play out:
1. 9.5k - 10k support holds - Bitcoin stays in a tighter range between 10k - 10.6k with lower volumes or,
2. Reach lower support - Bitcoin continues to flirt with important support before it creates a descending triangle with lower support at 7,118 - 8,300 USD.
Either scenario plays out, we need to see convincing volumes with large price volatility to confirm if Bitcoin finally breaks from here. Until then, there's not much to do but to hold on tight to your cash, plan out a specific strategy and let the market roll.
Psycholigcal and accumulating strategy
Try to guess the 24-hour price action is simply improbable and leaves yourself in risky positions. I don't mean to offend professional traders that make 2-3% off their trades but staying in front of the screen stressing out for long hours is not our strategy. We aim to make a consistent return over a long period of time while still spending time with family, friends or perhaps, grabbing a whiskey sour at a local bar.
We hunt crocodiles, not codfish. Maintaining cash is our priority at the moment. When the market reveals itself in one week, we will have a clearer picture of when to start stacking up our position. The key is beating all the short profit temptation, being patient and watching out for sentiments.
The answer is no ... YET. The market is consolidating and there is no clear sign that Bitcoin would elevate from here, YET.
Volume is weakening but we still see Bitcoin has been hovering above 9,500 - 10,000 USD. Interesting, right? The fact that Bitcoin hovers above this important support do not ensure that this level will hold. Indeed, there are two descending triangle scenarios that could play out:
1. 9.5k - 10k support holds - Bitcoin stays in a tighter range between 10k - 10.6k with lower volumes or,
2. Reach lower support - Bitcoin continues to flirt with important support before it creates a descending triangle with lower support at 7,118 - 8,300 USD.
Either scenario plays out, we need to see convincing volumes with large price volatility to confirm if Bitcoin finally breaks from here. Until then, there's not much to do but to hold on tight to your cash, plan out a specific strategy and let the market roll.
Psycholigcal and accumulating strategy
Try to guess the 24-hour price action is simply improbable and leaves yourself in risky positions. I don't mean to offend professional traders that make 2-3% off their trades but staying in front of the screen stressing out for long hours is not our strategy. We aim to make a consistent return over a long period of time while still spending time with family, friends or perhaps, grabbing a whiskey sour at a local bar.
We hunt crocodiles, not codfish. Maintaining cash is our priority at the moment. When the market reveals itself in one week, we will have a clearer picture of when to start stacking up our position. The key is beating all the short profit temptation, being patient and watching out for sentiments.
Note
29/9/2018 18:00PM (UTC) UPDATE:The market has revealed itself after 6 days of indecisive price action. As mentioned before, an indecisive pattern always tempts the crowd to go long or short, depending on one's perspective. There are two sessions that got us aware:
1. On 26/8 - Price action showed some positive sign on 4H chart as it tried to escape 10.6k mark. However, session closed with price being rejected by daily MA15, clocking at 10.36k.
2. On 28/8 - Price action shifted to neutral sign on 4H chart as it flirted with the closing price on 26/8. The session ended up with a huge sell-off that got Bitcoin dropped by 4.51%.
WHAT DO WE LEARN FROM HERE?
- Guessing price action in 24-hour or 48-hour, again, leaves your position at risks. Trying hard to maximise your return during uncertainty is like crossing the street with your eyes closed. No sense of direction and no margin of safety!
- Market temptation can be a pain in the ass when it comes to cut loss. The fact that price was lingering around such a tighter zone 10k - 10.6k with daily wicks towards both support and resistance is a positive sign of swing trade. However, as the crowd raised awareness to the support area, in this case, long positions came in more aggressively and this left us vulnerable. When the longs were forced out, we saw dramatic selling pressure.
- The internet can be misleading. You may execute a trade just by looking at someone said that Bitcoin will moon from here. In fact, this is called cognitive bias; as you tend to look up what you wanted to hear or an uncertain idea that was already developed. At the end of the day, you are nothing but a lamb which follows its mother. No specific strategy, no mindset and portfolio corrosion!
UPDATED TECHNICALS:
- Bitcoin has shown a higher probability of a sharper correction. At the time of writing, price is still within 5% volatility around 10k mark. If this critical support does not hold, Scenario 2 will play out as mentioned above.
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