Since the lowest of her crash in December 2018, Bitcoin, the queen of crypto-currencies, has regained its former glory. It is a nice bullish rally of nearly 190% for BTC since the lower point of his crash. Nevertheless, many traders are wondering whether it is appropriate to look for shorts. And the answer, from my point of view, is clearly positive.
After a pump of nearly 200% and a beautiful reversal configuration in Japanese candlestick (here, in weekly), BTC apparently wants to offer itself an excess and is finally heading towards its major resistance and its big psychological level around $10,000.
After such a fine rise, that one can almost consider it a bubble on lower time units, one can (logically) expect a long and painful correction for investors who hodl. Nevertheless, this will surely give swing and intra-day traders great opportunities for short selling. At what price should we intervene to try to get as close as possible to the top? Graphically speaking, some levels are quite easily identifiable and can be highlighted as you can see in the following graph.
If we look at the last areas of volumes not “revisited” during its decline phase (at the end of April – beginning of May 2018) by BTC, we see that 2 areas are interesting to sell: $9,550 to $9,680 and $9,760 to $9,945.
After the pattern of reversal in Japanese candlesticks that can be seen on the following graph, we can expect a kind of excess of market madness that will most certainly come up against resistance from the 10K. But there is no guarantee that the market will come to touch it before it turns around. Nothing grows either to us that the market will turn around. However, after a trend of nearly 190% in a few months, a correction is more likely than a continuation of this upward momentum: I, therefore, prefer sales.
After slowing down (downward divergence RSI), prices oscillate in a range. So, I patiently wait for the exit of this range to be from the top (if this is the case), and I will try to short BTC on the 2 zones indicated, on confirmation of price reversal of course (for my part, I use a lot of Bollinger bands and Japanese candlestick structures).
Once again, patience is required. Sales must be made on the signal of a price reversal (here, free rein to your imagination) and only small amounts will have to be invested: no certainty indeed that prices will stop around $10,000 and it is quite possible that this resistance will be slightly overwhelmed… or more than slightly overwhelmed.
Answer in the next few days.