Bitcoin: 17K Test In Range.

28 באוג׳ 2022

Bitcoin breaking 20K (again) further confirms bearish momentum which puts the 17K low on the horizon for the coming week. There were 2 sell signals in the previous two weeks (I described both of them in my previous articles and streams). If you are not short, NOW is NOT the time to REACT. The effective thing to do is prepare for what the next signal can look like.

For those who thought Bitcoin was going back to 30 or 40K, as you can see, the market does not agree. If you were lured by big talk by false authorities, it is not them to blame, but instead your own emotional needs. You should know by now hope and fear are what drive the herd. If you are moved by such irrational forces, then YOU are part of the herd, YOU are the profit opportunity. Once again, listen to PRICE not people.

The broader price structure AND economic environment have been BEARISH the ENTIRE summer. Just because Bitcoin went from 17K to 25K does NOT mean ANYTHING in terms of the broader trend (as you can see NOW). As I have mentioned previously, bear market rallies are confusing and hard to grasp because everyone expects "logic" to play a role in the markets. The reality is, it is antithesis of logic that drives markets, also known as irrational behavior. Stop asking "why" and instead as "where" along with "how" price is likely to behave. TRUST the price, it is a reflection of ALL the known information in the world in a given moment.

Lower highs often lead to lower lows. As I wrote previously, 24K is now a LOWER HIGH. There is also a minor lower high in the 21K to 22K area. The entire zone between 22 and 25K was a potential resistance area where this type of activity was reasonable to expect. The fact that price could not clear this zone is what helped me maintain a BEARISH outlook (even though I do not short Bitcoin).

Getting short now carries too much risk because the 20K area can see short squeezes. This type of situation is best for smaller time frame ideas, NOT for swing trades. As far as a new short, either price retests the 22 to 23K area followed by a new sell setup OR a momentum continuation pattern appears (inside bar) followed by a break of the low of that inside bar. At this moment, there is NO setup which means there is NO reason to do anything.

Keep in mind, price may just continue lower without any signal. Betting on this is extremely aggressive. The reward/risk at this price is not attractive if 17K is to be used as the measure for potential. What if 17K breaks? Then 14K becomes the next reference point.

There is no reason to be long at this time. If you looking to invest, keep it SMALL. We are in a very unfriendly economic environment for highly speculative assets like Bitcoin. The S&P sold off for the SAME reason. Don't fight the Federal Reserve.

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