Bitcoin: Impulse To Complete At 35K?

16 เม.ย. 2022

Since the recent peak at 48K, Bitcoin has established a bearish impulse wave that clearly shows 4 waves in place. This points to a greater chance that price will complete the impulse (5 waves) which can lead to a test of the 35K area over the next week or two. Add to that the context of the overall market environment, and this bearish scenario is still favored compared to any optimistic views. Here is what I am anticipating:

1. A test of the 35K support is still very plausible. IF price can test this AREA, and provide a reversal pattern, I am open to the possibility of a long on the swing trade time frame with a very conservative profit target. This type of trade is aggressive because it goes against the overall structure of this market.

2. IF 35K is compromised, the next major support area is 28 to 30K. I will also be open to an aggressive swing trade long IF the appropriate signal appears. Again with a very conservative profit target.

3. Any minor bullish retrace back into the 42K area (blue rectangle on chart) can offer a swing trade short opportunity. (I do not short Bitcoin and I am not about to start now). The overall market context favors sell signals and the continuation of bearish momentum. This location is more attractive in terms of reward/risk compared to selling into just any low.

A few things to keep in mind: I am NOT trying to figure out the next market move, I let the market (and all the fake gurus pretend to) do that. Once the market shows its hand and offers a particular setup upon its secondary move, THAT is when I can measure risk and potentially take a position that has a greater chance of a profitable outcome. MY RULES help me identify such opportunities and prepare for them in advance. Reacting to the moment is nothing more than herd mentality behavior.

It is important to realize: you cannot effectively trade off of an isolated chart. EVERYTHING on your chart is obsolete. You must consider inter market relationships and other macro economic factors that SHAPE the potential of the overall environment. This helps to maintain an OBJECTIVE point of view along with gauging potential that is REALISTIC. For example, interest rates (see the 10 Yr Note) have increased over 70% in recent months in the U.S. THIS type of environment will only put BEARISH pressure on EVERYTHING, just not all at once. It's not about how the market is acting now (irrational), it is about how this bearish potential will shape the vulnerabilities and expectations in the future.

Don't think, prepare. The environment is NOT going to get easier (no magic rallies) any time soon. Protecting capital and mitigating risk should be your top priorities, NOT chasing occasional profits.

Thank you for considering my analysis and perspective. I hope you find it helpful.