Bitcoin: Bottom Is In? These 2 Signs Can Offer Proof.

2018年11月30日

BTCUSD update: Since the dovish FOMC meeting, this market has gone from a low of 3446 to a high of 4415. Which serves as just another example of how sentiment drives price on the short term. Although a 12% move off the low is encouraging, this market has not demonstrated any real change in the momentum on the bigger picture. Yet.

The bearish trend line that has recently been established is still in play. As long as this is the case, price still has a good chance of breaking the next support around the 3600 area. IF that happens, 3K will still be a real possibility.

Price structure determines our short term outlook, nothing else. And price structure changes. In order to consider any new trades, price needs to do 2 things: 1) Build a bullish structure, 2) Take out the 4650 area. That is what our plan dictates, and it has saved us a ton of money in terms of potential losses as this market sold off.

We make it a point to separate our strategies and do not mix long term positions with short term trading. This is why we still carry inventory and have no intention of selling it, especially at the lows. Not using any leverage has been one of the key factors in managing our longer term risk and prevented any margin liquidations that so many had to deal with.

Our plan has not changed since this market took out the 4800 support and it is: step aside. It is simple and effective. Reacting, or trying to trade both sides of this market is just not worth the risks. Just ask all those who insisted on staying short below 4K. We do not short these markets, and we even warned those who wanted to about the higher risk they faced.

We are open to the possibility of aggressive swing trade longs, but only AFTER price proves itself. Pulling back and forming a higher low is a scenario that is in line with our bullish price structure requirement.

Unlike the droves of chart gurus who claw for your attention (just look at all the charts in the comment section), we do not pretend to know the future. We do not make predictions and instead adjust as the market changes. We follow our rules, evaluate price patterns and always manage risk. All the behaviors that do not appeal to the herd.

In summary, Bitcoin is not yet showing signs of continuing strength. This can change in the next couple of weeks, BUT until it proves itself there is NOTHING to do here. The bottom may be in, but we will not know until structure provides the evidence. Remember, a top or bottom is not an event, it is a process.

Buying low is always a better choice than buying a high, BUT you must always consider: what IF it goes lower? 3450 may be the bottom, but there is NO precision in this game. What if 2K is the bottom? It's not about being right or wrong, it is about how much RISK you can handle.

You will get further in this game if you focus on risk management and best practices rather than focusing on lines on a chart, or worse the rewards. Ever notice? The less experienced (especially the marketers) are always pushing: "I'm right", "How much I made", "The RSI", or posting 22 updates in less than 22 hours. If you want to learn how to put your money to work, start by asking yourself one question: "What if I'm wrong?". It all begins there.