Weak breakout on BTC
Updated
BTC has just barely broken out of the wedge I addressed earlier. It did so with low volume, and formed dojis on the 4 hour, suggesting the breakout did not inspire sufficient confidence to rally to 8,000. I expect that we will drop down. I see three scenarios in play, indicated by the green, orange, and red lines.
Trade closed manually
More 4hr dojis, but descent has slowed. 4hr stoch RSI dropping steeply. I have closed my margin short positions, and have started scaling in on spot. I anticipate a retest of resistance at around 7775. If that fails for a third time, we're going down hard. After BTC is above 7650, I may put in stop-limits to sell and to scale in short positions between 7590 and 7500.Trade active
I had scaled in completely before the drive to 7650 and opened a small long position halfway through the pump. We will likely see an attempt for 7800 again, and what happens there will be decisive.
If 7800 is broken and support is established above, we're probably in for a couple weeks of upward movement.
If it fails, we can likely count 7050 to 7780 as a full cycle and we may retrace to 100% or beyond.
Levels are roughly:
0.236 = 7600
0.382 = 7500
0.5 = 7415
0.618 = 7325
0.786 = 7205
1 = 7050
1.618 = 6596
2.618 = 5865
If it bounces down from 7800, I will likely scale in short positions between 7640 and 7600. Once 7600 is broken with accelerated selling, I will trail stops beginning at the entry and moving down each fib level, taking profit at the lowest level that is breached.
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