February 3, 2023

mazeltogether

mazeltogether

Chart of the day: Bitcoin caught the “bears” by surprise

We started warning about the fall of the cryptocurrency on April 11 and then issued a new warning in mid-April, when bitcoin was updating record highs. When the price rose above the $58,000 mark on May 6, we directly recommended the sale and set a target of $30,000. Since then, we have repeatedly repeated this recommendation.

After bitcoin fell below the $40,000 level on May 20, we assumed that the leader of cryptocurrencies could recover, but then, at the auction on June 8, we identified a short-term “bearish” figure and reflected it in our trajectory. This short-term “bearish” figure, however, has turned upside down, and now we are opening a new chapter in the adventures of bitcoin.

Bitcoin has made a breakthrough of the “bearish” pennant, powerfully unfolding the market trend. Such 180-degree reversals can trigger a powerful movement in the opposite direction to the one in which traders originally planned to move.

If earlier traders expected that the pennant would lead to a fall and shorted bitcoin, now they are forced to buy cryptocurrency to return it to the broker, which increases demand. This sudden spurt should serve as an incentive for the chaotic activation of the “bulls”.

In addition to this, traders looking for a good moment to enter may decide that it has come, adding even more weight to the “bullish” camp. In this case, it turns out that most of the participants are pushing the market in one direction — up.

However, it is important to keep yourself in hand here

When trading above $44,000 on the bitcoin chart, the neck line of the “head and shoulders” figure is extended, which may remain the mainstay of the “bears”. Therefore, at this stage, we consider the price between $37,000 and $43,000, where support and resistance are, fair, and we trade at these levels.

Trading strategies for building a long position

Conservative traders should wait for a pullback with confirmation of support above the wedge.

Moderate traders should wait for the same pullback, at least as an additional confirmation, for a more optimal entry point.

Aggressive traders can act at their discretion, provided that they do it according to a pre-developed, consistent plan that reflects the degree of risk readiness and provides for an exit strategy.