Namaste to all investors and traders. 🙏
If you have carefully read and understood my previous blog on Bitcoin, then I am sure you would not have bought Bitcoin at those levels. Because I had clearly stated with proper reasoning that this selling does not appear to have been done by weak investors. Now the dominance of bears can be clearly seen with the confirmation of trend change in Bitcoin for the last 2 weeks. And since after Monday's selloff, #Bitcoin has also broken the psychological level of 40K, so now it has become necessary to analyze its further movement.
Source | BTCUSD chart 1-Day time frame.
To the right of the blue vertical line in the image above is the price action that has occurred since our previous analysis. Whereas till now we were considering the bears weak because, in any previous selling attempt, none of the candles were able to close at the lower level of the trend which you can understand by looking at the white up arrows. But if we look to the right of this blue vertical line, the very first candle broke the trend and showed complete control of the bears. This is what I warned you about because the dominance of the big bears was clearly visible in the previous bigger red candle.
Source | BTCUSD chart 1-Day time frame.
Well after this now a changed #trend of 'lower lows and lower highs' can be clearly seen on the chart which you can understand by the light white marking where every time after some buying the bears easily take the price to a new low. From the current downtrend point of view, the recent lower high can be seen as an immediate resistance zone. Like I have marked one through a grey stripe in the image above.
So what we are going to do is treat the recent lower high as resistance and wait for a bearish pattern from somewhere in this area or below. Which you can understand even in the 4-hour time frame. If this first resistance is broken, as the candle being formed today looks quite bullish and if it closes near the day high then the previous lower high may appear to act as a major resistance area. Because psychologically the previous trend had changed only after the selling from there.
But here I will again repeat what I said in one of my recent blogs Willful Misinterpretation of Buy Low, Sell High Strategy, that just because you know the resistance does not mean that you should start trading as soon as the price reaches that area. You will always have to wait for the right price action to confirm the dominance of one of the bears and bulls.
Trading without a trading plan is no less than gambling.
Now, it is important to understand one thing here from a short-term trading perspective, we have to look for selling opportunities and not buying. Because the trend has been confirmed to be changing and in such a situation, if you fall into the trap of volatility and make a hasty decision, it may cost you dearly.
This can be understood by another concept of technical analysis: Trend is your friend. According to this concept, your chances of getting good trades in the direction of the trend are always higher. By good trades, I mean not only winning trades but also achieving bigger targets in your winning trades with very low risk.
Thank you for being here and appreciating my blog!🙏
English is not my first language. So sometimes I use 'Google Translate'. Please don't think that anything I have written in this blog has been copied from somewhere or is AI-generated.
Keep Learning, Earning, and Growing.
Have a Happy day!
Posted Using InLeo Alpha
