Bitcoin: Watch For Pullback 60K.
Bitcoin / U.S. dollar BITSTAMP:BTCUSD
MarcPMarkets
Bitcoin has retraced off the 56,400 area support (level has been on this chart for months), straight back to 64K. The arrows on the chart point to the consecutive lows that characterize a failed low pattern. This brings price to a tricky area for new swing trades. The 64K area is a resistance and NOT an ideal spot for new longs on this time frame. In this scenario I am waiting for the retrace (see illustration) back to 60K support to look for swing trade long signals.
In fact my system (Trade Scanner Pro) is showing a long at the current price on this time frame, but the risk is enormous (like 7K points). This is where having a good grasp of context can help to filter out such low probability signals. Identifying RELEVANT support/resistance levels in advance provides a way to ANTICIPATE price behavior and offers an effective reference point to expect signals. Not to mention the boost of confidence that comes from the preparedness when the signals appears.
It is also important to understand that when using conventional methods to evaluate ANY market, the random nature will most likely lead to a 50% probability of being right. Most traders (especially beginners) place heavy emphasis on being right (high win rate) and do not realize that is the equivalent of expecting a high win rate from a slot machine. Slot machines are 100% random (in theory anyway) while the market is not because markets trend. This means there is a chance to beat the market BUT it requires strong knowledge of inefficiencies and typical trader behavioral patterns (not common tools like RSI).
I mention this because the illustrations on my chart that represent the scenario that I am anticipating for the coming week are not always right and nor do I expect them to be. These are not forecasts, these are ideal patterns that I would like to see in order to confirm some kind of action or decision. It is basically a big IF. I have no clue where the markets are going, instead I come up with an estimate based on recent history and then ADJUST to what the market actually chooses to do from there. ADJUSTING is KEY.
The sooner you accept this idea, the sooner you will begin to appreciate high value market information vs. the 99% of nonsense that most traders consume (too much internet!). Less is MORE in this game simply because most of what is publicly available does NOT improve your chances of positive outcome over time.
Thank you for considering my analysis and perspective.
