BTC - Retest of Yearly Lows
Why I Am Short
My general rule of thumb is this - you short pops in bear markets and you go long on dips in bull markets. It sounds so simple that it's almost stupid to believe just this rule alone will make you profitable. However, it keeps you on the right side of the trade and that alone is a necessity for making you profitable.
With that said, the only times I will ever look to be counter-trading the major trend is when we are approaching oversold conditions with price action tapping the extreme lower bands of the Bollinger Bands. In that situation, I would always be aiming for a profit target slightly below the 50EMA as that is a probable profit target capturing area.
Right now, BTC has tapped the daily lower bands on Aug 8 and I believe it will do the same within this coming up week as we are forming a right angled descending broadening wedge (Bullish pattern usually).
* 5,670 may get retest in this dip as we complete the formation inside of this range
* This allows a sizable range for profit as I do expect the ranges to increase in the following days (this is uncommon because most patterns shrink ranges as apex approaches). This makes it difficult to profit inside of pattern formations if you're late to the party.
* An upward breakout would allow me to measure the profit target by measuring the distance between the breakout of resistance to the lowest low inside of the broadening wedge. That distance would then get carried upward beginning at the breakout spot.
* A rising volume profile into the breakout would provide me with the most confidence as to a legitimate breakout.
* We are still in a major bear market and the major pattern seems to be forming a descending wedge - a common pattern for a major trend reversal.
My general rule of thumb is this - you short pops in bear markets and you go long on dips in bull markets. It sounds so simple that it's almost stupid to believe just this rule alone will make you profitable. However, it keeps you on the right side of the trade and that alone is a necessity for making you profitable.
With that said, the only times I will ever look to be counter-trading the major trend is when we are approaching oversold conditions with price action tapping the extreme lower bands of the Bollinger Bands. In that situation, I would always be aiming for a profit target slightly below the 50EMA as that is a probable profit target capturing area.
Right now, BTC has tapped the daily lower bands on Aug 8 and I believe it will do the same within this coming up week as we are forming a right angled descending broadening wedge (Bullish pattern usually).
* 5,670 may get retest in this dip as we complete the formation inside of this range
* This allows a sizable range for profit as I do expect the ranges to increase in the following days (this is uncommon because most patterns shrink ranges as apex approaches). This makes it difficult to profit inside of pattern formations if you're late to the party.
* An upward breakout would allow me to measure the profit target by measuring the distance between the breakout of resistance to the lowest low inside of the broadening wedge. That distance would then get carried upward beginning at the breakout spot.
* A rising volume profile into the breakout would provide me with the most confidence as to a legitimate breakout.
* We are still in a major bear market and the major pattern seems to be forming a descending wedge - a common pattern for a major trend reversal.
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