Are We Going To $80k?
Обновлено
Here's the deal,
As being one of the first trades to point out Accumulation, i've been at both sides of the story. Price being right at the middle of the trading range, it's time to evaluate current situation from both angles.
1- We are in Accumulation.
The spring action is being tested and breaking 37k would validate it along with higher highs and lower lows.
In Wyckoff analysis, horizontal column counts are used to calculate potential. Right now we have 17 columns (17x3x1000=51.000) and this fuel is enough to take us to 80-84k area. Wait, but aren't we going to 100k? Well that's the psychological target, but the current state of our data says we have enough fuel for 80-84k.
The good news is that the more we go sideways the higher we go.
2- We are in Redistribution
The poor rally and break of the uptrend are weaknesses that can validate a redistribution. However, the 17 column count far exceeds the current price level, which i mentioned in my previous analysis. We simply can't fall below zero :)
So, in an effort to make this work, i've segmented the structure in to two at the second highest volume drop. That is the last 5 columns and that equals to a 15k drop, taking us to 20k as widely rumored.
Calculate Your Risk
If we want to open a long position today with a traget of 80k and a stop loss level at 18k, our risk to reward ratio will be 2.76 - at the worst case (if we are not going to 10k). This means If you invest $100 today, you'll have $376 when the price target is reached. Not bad.
However, if the shakeout happens, the worst case we can see is 18k, meaning a ~50% drop. Will you be able to handle that stress without selling? TBH I don't know the answer, but the reward is still 2.76x if you stand strong. With proper risk management and position sizing i believe this risk can be mitigated.
Final thoughts
I see 2 possible scenarios now:
1- A rally towards 80k followed by a small re-accumulation, taking us above 100k
2- A break down to 20k followed by 7-8 weeks accumulation, following a rally towards 80k, followed by small re-accumulation towards 100k.
I'm really neutral here, but looks like 80k will be an important level.
What's your take? Go long now, or wait for 20k?
As being one of the first trades to point out Accumulation, i've been at both sides of the story. Price being right at the middle of the trading range, it's time to evaluate current situation from both angles.
1- We are in Accumulation.
The spring action is being tested and breaking 37k would validate it along with higher highs and lower lows.
In Wyckoff analysis, horizontal column counts are used to calculate potential. Right now we have 17 columns (17x3x1000=51.000) and this fuel is enough to take us to 80-84k area. Wait, but aren't we going to 100k? Well that's the psychological target, but the current state of our data says we have enough fuel for 80-84k.
The good news is that the more we go sideways the higher we go.
2- We are in Redistribution
The poor rally and break of the uptrend are weaknesses that can validate a redistribution. However, the 17 column count far exceeds the current price level, which i mentioned in my previous analysis. We simply can't fall below zero :)
So, in an effort to make this work, i've segmented the structure in to two at the second highest volume drop. That is the last 5 columns and that equals to a 15k drop, taking us to 20k as widely rumored.
Calculate Your Risk
If we want to open a long position today with a traget of 80k and a stop loss level at 18k, our risk to reward ratio will be 2.76 - at the worst case (if we are not going to 10k). This means If you invest $100 today, you'll have $376 when the price target is reached. Not bad.
However, if the shakeout happens, the worst case we can see is 18k, meaning a ~50% drop. Will you be able to handle that stress without selling? TBH I don't know the answer, but the reward is still 2.76x if you stand strong. With proper risk management and position sizing i believe this risk can be mitigated.
Final thoughts
I see 2 possible scenarios now:
1- A rally towards 80k followed by a small re-accumulation, taking us above 100k
2- A break down to 20k followed by 7-8 weeks accumulation, following a rally towards 80k, followed by small re-accumulation towards 100k.
I'm really neutral here, but looks like 80k will be an important level.
What's your take? Go long now, or wait for 20k?
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