Caution is Neccessary, Bitcoin Traders
Readers of the weekend update article will no doubt now understand why I said that I was going to pocket my gains in bitcoin at the $715 point. To recap, this is what the daily chart looks like:
I pointed out that as of Saturday night, pricetime was bumping up against 4th arc resistance. While 4th arcs do not typically stop strong advances such as this one cold (but NEVER say never), they quite often slow advances down with a pullback.
So it was that I suggested that it was a good time to pocket the $80/coin we had made since we called the start of the advance at the end of the 3rd square. I was worried that price might blow right through resistance while I slept, but as I’ve said before, I don’t mind missing an occasional rally if the smart move appears to be one of caution. Caution paid off this time.
So what’s next? Of course, I don’t know for sure, though it seems likely that the rally will resume and price will get through the 4th arc pair overhead. When/if it does, I will be a buyer again. But you know, we haven’t looked at a bear setup in a while. While my sense is that this bull rally is not over yet, let’s see what the chart says:
This chart is actually a bit disconcerting to the bull case. The arrows point to areas where we can see that pricetime respects the setup. Note that the rally was stopped by the 5×1 Gann angle, and as I type these words price is stuck under the 4×1 angle. More importantly, unless price resumes strongly upwards, pricetime will soon exit the 2nd arc pair of this bear setup. If it does that without having broken through the Gann angle resistance we see here, I will reconsider my bullishness, and sit on the sidelines until I see convincing evidence that the bull market is going to resume. It remains quite possible that the 4th arc of the bull setup above really IS going to be the one that stops the advance.
We should have an answer soon.
Happy trading!
Remember: The author is a trader who is subject to all manner of error in judgement. Do your own research, and be prepared to take full responsibility for your own trades.
