Bitcoin: Will 30K Hold Again?

2021年6月6日

Bitcoin continues its indecision between 40K and 33.5K. I wrote previously that if 40K cannot be decisively taken out, then the 33.5 or the 30K supports are likely to be tested again. The lower high established at 40K is in line with the potential bearish momentum continuation pattern scenario. Lower highs often lead to lower lows (unless the market can prove otherwise).

This movement is in slow motion, and I get a LOT of questions about how and where to buy Bitcoin. There is NO buy signal at the moment, and our LONG only swing trade strategy helped us to avoid the low quality buy signal that appeared a week earlier. How many bull market geniuses were calling for longs? Like I always remind my followers listen to PRICE NOT PEOPLE (especially on public platforms).

Then I get the questions about the short side. Based on the time frame that we follow, the recent price structure has yet to prove it is in a bear market. The current movement since the 65K peak appears to be within the constraints of a broad Wave 4 (for a good example see XAUUSD from August to March). Wave 4's are corrective moves of a larger degree trend. Considering the bottom of the larger magnitude Wave 3 is around 3K, the broader trend is still CLEARLY bullish.

So how do you trade around a corrective or counter trend structure like a Wave 4? Our objective is to WAIT for the Wave 4 bottom to establish itself (like Gold at 1675). That bottom may be 30K, or it may be 20K either way the MARKET needs to provide the evidence. A broad consolidation like this one can persist for months. This perspective helps us to assign more weight to support levels and be open to more aggressive trades off of such levels since there is a better chance they hold (major supports like 30K and 20K). We have a very strict policy against shorting Bitcoin or any alt coins so that is not even a choice for us to consider. You don't need to play both sides of a market to come out ahead over time.

While the short term momentum may be bearish, we do not confuse this with the magnitude of the broader trend. From a SWING TRADE perspective, we would rather forfeit better prices in exchange for a better or more supportive environment. For example, the bottom of Gold was 1675 but the buy signal was not confirmed until 1720 which is where we got long back in March. There was no way to know 1675 was the bottom until the market proved itself AFTER THE FACT. This will be the same for Bitcoin.

If you are confused by this environment which is perfectly normal, here are two things you can do: 1. stop listening to people, ESPECIALLY those who are constantly flip flopping and begging for attention by putting out a lot of action calls. 2. focus more on the larger time frames (especially if you are not day trading). This is where significant changes will appear and confirm (not your 5 minute chart).

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