Bitcoin: Reversal Off Of 40K ?

٢٦ سبتمبر ٢٠٢١

There is a lower high established off of 45K while at the same time, price is not breaking 40K. The current candle generated a sell signal which has quickly failed. This is a potential higher low scenario, which is one of the swing trade long scenarios that I have been describing recently.

IF 44K is broken, a new long signal will be in effect. The risk from this level is 4K points which means price will need to reach the 48K area in order to begin to justify this risk. What are the chances it can do that over the coming week?

The argument against this long scenario is the bearish structure that is still in play. Lower highs often lead to lower lows, and until the structure changes, swing trades on the long side are aggressive. If the 40K support breaks, the next level is 37K.

IF price establishes a double bottom or higher low (which it is trying to do now), that would signal a change in the recent structure and may be the start of the next leg higher. The conservative thing to do in this situation is to wait for the 45K resistance to be taken out, followed by a continuation pattern. While you will not get the best price, you will be entering within a more supportive environment.

I remind my followers often, this is NOT about how well you can read a chart, or how much "news" you can consume so that you "know" what is going on. This is a game of RISK. If you don't understand this yet, then more than likely your decisions are based on fear. Afraid to miss the next move, etc.

Charts help to isolate a potential opportunity, and to define its risk/reward. The ability to profit consistently in this game is a function of how much risk you are willing to take AND how you adjust your risk as the market provides NEW RELEVANT information (not what people tell you). Reacting to what others say, or to things you think you see is ineffective because you are mostly reacting to RANDOM information.

Focus on and learn how to manage risk, not on what moving average is the best one to use.

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