BTCUSD Perspective And Levels: Failed High Or Minor Retrace?

2017年10月30日

BTCUSD Update: A push to a new high, but could not sustain the break out. This failed break is a bearish sign which still maintains the possibility of the C Wave to unfold which can take prices to the 5500 area or even the 5360s.

Aren't new highs usually a bullish sign? They are, but in this case, not only is price structure presenting a possible double top, but can also be showing the B Wave that I wrote about in my previous BTC report. B Wave corrections are 3 leg waves that can actually take the market to a slightly new high, just like what has happened in this market, and then fall apart which is the C wave. Now keep in mind, I am estimating the near term direction based on the price structure that is in place at the MOMENT. Things change very fast in this market, and the ability to adapt quickly is what makes a good trader good, not getting stuck on an opinion and then complaining that my analysis didn't play out. For the less experienced, TA is not a weather report. This is why I always recommend learning how to make your own decisions, so that when the market changes, you can change with it, instead of fight it.

The other factor that is prompting me to expect weakness from this point rather than strength is the area of price failure. The 6200 to 6400 zone is actually an extension based on the recent swing from 6206 to 5362. This zone is where false breakouts are more likely to occur, so if the market is going to break out, it needs to clear this zone, not run up into it, and then sag like it is now. I do not short these markets which I have explained previously, so the best I can do it use these signals as a reason to stay flat.

A confirmation that more selling is likely would be a break of the 6k level which is not only psychological, but it is now the .382 of the recent bullish swing. Shorting this market can be rewarding, BUT as I keep writing, you must be on top of it, and you must have a solid plan so that you can recognize when the market is turning back up and get out quickly (definitely not a good idea for less experienced traders). If you are trading without a set of criteria to guide your decisions, then you should not be trading at all in my opinion.

What about the higher low at 5632? I wrote about this scenario in my previous BTC report as well. This structure cannot be ignored and certainly challenges the short argument. It is possible that this level is a Wave 2 bottom which makes the current leg a possible Wave 3 of 5. This is where the market must choose. If price manages to stay above the 5960 area, and starts pushing highs, then that would be a confirmation which can take prices into the 6500 area. I don't know if this will happen, but any sharp rally from the current level will confirm this scenario.

In summary, for those who are less experienced with TA, it is far from an exact science, and you must not expect a forecast to play out exactly. TA offers tools and methods to isolate potential scenarios from countless possibilities. From that point, we can then evaluate risk and reward and decide if the trade is worth taking in accordance with our plan and risk tolerance. In the case of this market, the risk is still too high to buy for ME and since I do not short, then all I can do is watch. I am interested in buying AFTER price has retested a support zone like the 5500 or 5350 areas (that is IF the market offers that opportunity). If price can reach the lower 5k supports, that would be a convenient area to complete this possible Wave 4, and that is where the lowest risk opportunity is to participate for a Wave 5 back up into the 6500s. Either way, this market will eventually line up with my criteria, and when it does, I will be prepared to act.

Comments and questions welcome.