Bitcoin – Waiting For Two Levels.

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bitcoin analysis

Bitcoin has not made any progress since my previous article, which simply means the market is OUT of play. Price structure continues to present the same two levels of interest: 30K and 38K. Until price decisively takes out one of these areas, the consolidation is likely to continue.

What to do? “Nothing” is a viable option. Having an opinion will not help, and can lead to getting stuck on the wrong side, especially if you are of the stubborn type. If you are confused or frantically searching for reasons, you are stuck in the typical herd mentality mindset, which is a part of human nature not well suited for financial markets.

Lesson to learn is this: let the MARKET choose, and then adjust expectations. If the market breaks 38K, that will prove that strength is likely to follow through. In that scenario we adjust by placing more weight on the following buy signal. If the 30K AREA (which includes 28.5) is cleared, then that proves weakness is more likely to follow through, and we adjust by stepping aside and waiting for new signs of price stability.

Shorting is not within the scope of our strategy, and we are not changing that any time soon, ESPECIALLY near a low of a consolidation that can develop into a broader higher low within the context of the bigger picture.

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People ask me how to stay out of trouble in this environment. It is hard to have self control when price can look dramatic at times (especially on small time frames). The simple answer is: RULES. You must have them. They are there to filter out all of your impulses, hunches, and other random and irrelevant reactions to a variety of market information. Rules should be very simple, personal and EASY to follow. And before you can have the appropriate rules, you must be able to define what type of trades you want to take: day trades? swing trades? position trades?

This quiet time in the market is an opportunity to research strategies, test ideas, conduct long term analysis and paper trade. So when capital comes back to this space, you will be much better prepared, and separate from the new population of reactive members of the herd mentality.

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

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