50x leverage no brainer short trade (easy profits)
Keep in mind:
With a big daily bearish engulfing candlestick we are most likely to continue the downtrend for the coming days. Looking at the RSI (daily timeframe) it is clear that we now are in a downtrend from previously being in overbought territory. We are most likely to go from overbought to oversold on the RSI and are now looking for a big downward movement! The MACD is showing weakness on the buy signal it has printed on the daily timeframe and is showing a strong sell signal on the 4 hourly timeframe.
Most important information:
Price action is the most important information you can get and trading on price action is what the pros do!
What we can see is that the price of BTC now is inside a strong key resistance area. Combining this with the huge rising wedge we are most likely to fall back down to the 75k area. Keep in mind that we didn’t really get a good backtest of the 69k-75k support zone so we could be looking to make a good backtest of this zone before continuing the macro uptrend.
I can also identify a failed bullish ascending triangle followed by a trend with lower highs. When the second lower high formed on the hourly I entered the 50x leverage trade at 108528,7 and placed the stop loss above that lower high. Keep in mind that the trend is your friend and that we most likely wont hit the SL. At least not before moving the SL into the profit zone (preferably above a lower high that will form). I have currently put my TP at 75950 (a long way down) because I want to ride this short as long as I possibly can. I also think that we are most likely to keep consolidating (until proven otherwise) between the given ranges (from 69k all the way up to 112k).
What about the news?
I think what president Trump does is the most important news we have to consider while trading. At the time of writing it is still unclear if the Musk VS Trump drama will continue. Bringing negativity into the market. The latest trade agreement with China was also not in favor of the United States (The relation between the two countries can strengthen but at a core financial view this ain’t good). Trump also kind of acted like a dictator in the Los Angeles event (this could bring negative energy into the markets). All in all I think that the news is a bit unstable and this strengthens the hypothesis that the price of BTC will consolidate until better times is around.
Conclusion:
I can always be wrong with either my complete analysis or parts of it. But I think that we at least is going to see a 1,65% move to the downside from my entry point. This move is extrapolated from the failed ascending triangle and seeing this move will give me the opportunity to make the trade risk free (I will keep you updated when this happens)!
Trade closed manually
As the price drastically reversed and we didn’t see that lower high I wanted to see, I decided to take a +16,19% profit. It’s not a lot considering that I was up about 90% at max but remember that no one ever got poor by taking profits!
Keep in mind that we actually hit the extrapolated price target for the failed ascending triangle and that we actually reversed at the very first support zone. I always had this scenario playing out in my mind but I didn’t think this actually would happen since it was weak support. I also thought that the downtrend would continue and also be steeper because that is what we historically has seen when BTC has gotten rejected from this macro resistance zone. A 7-12% steep downward move is the fractal that should have played out (this is why the downtrend ain’t over yet!)
Note
I am now looking forward to take another short position when I see that the price is topping out. At the time of writing I can see a potential crocodile tooth shaped bearish formation taking form. Indicating that that the price most likely will see a steep continuation of the downward trend and that the new “real” lower high has taken form. As I was writing we actually did see the 15min red candle close I wanted to see and I entered another 50x short position at 108005. I will still keep my TP way down just in case we get some crazy price movement. Considering that the volume has dropped a lot since April and is currently what I would call ridiculously low. An explosive move to either side is absolutely going to play out (my entire analysis as a whole prove that prices are most likely going to plummet). I could be wrong that this is the new “real” lower high but we have now seen the price cut into previous price action (the previous lower high) and gotten rejected. Now I need to see a break of the previous (micro trend) higher low at 107428 and I also need to see lower highs taking form. I still need to see this to confirm my hypothesis but the crocodile tooth formation does indeed indicate that this is most likely going to happen! I’m short in this bih. Let’s get this bread!
Note
Sorry for being late with updating the idea, but we have now broken through the first critical support zone (the one I considered weak) and we are also seeing lower highs taking form. I have also made the trade risk free by placing the stop loss at about +50% ROI and are looking to strategically move the SL deeper into profits. If the price rapidly moves down, for example a flash crash, I will move my stop loss based on earnings combined with giving the price room to wiggle. And if the BTC price moves in a more natural way down I will usually put the SL above the previous, newly created or often a lower high that is taking form. It depends on what the technicals allows me to do! At the time of writing I am currently in about a +100% ROI and it looks like I soon can put my SL at about +70% or even +80% ROI. Let’s see how deep into the abyss we possibly can dive!
Note
I ended up by taking profits on the second trade as well and made about 175% profit. I am also currently in a new short position at 104478Note
I lost on that third trade but is still in profit. Time to look for another opportunity!Note
We are currently backtesting the critical resistance zone. We can go deeper into the zone but I think we eventually will drop down and continue the downtrend!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.