After another “stellar” rally that was supposed to reach 100K by next week (I’m exaggerating), Bitcoin has instead established a lower high formation off of a notable resistance area. While this price action is bearish, that does not mean Bitcoin is going into a bearish trend. The objective is to be prepared for a new buy signal off of an anticipated support area.
The first support is between 57 and 60K while the second support is around 50 to 53K. In order to prompt a new swing trade long idea, the price needs to establish a mini reversal pattern like a double bottom, etc. Or it needs to establish a single reversal candle like a bullish pin bar.
The key is WAITING for the formation or candle to develop and then CONFIRM. Jumping in at a level alone is ineffective because of the highly random nature of the market.
Once the formation establishes itself, RISK should be clearly defined. In this environment, it has typically been around 4K points. IF a buy signal can appear around 61 or 62K for example, with 4K points of risk, it should still be within reason to obtain at least a 1:1 reward/risk.
Keep in mind, IF price clears these supports, then it would be a good idea to step aside and wait until a more favorable structure appears. All markets are highly random and the focus should be about managing risk, not chasing the rewards.
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