Posts

What Last Weekend's Bitcoin Price Action Really Shows

avatar of @forexbrokr
25
forexbrokr.
@forexbrokr
·
·
0 views
·
2 min read

Direct from the desk of Dane Williams.



Unless you've been living under a rock, you would have seen that after ripping to $12,000, Bitcoin corrected hard and dropped over $1,000 in mere seconds.

Just take a look at the Bitcoin hourly chart from TradingView which includes last weekend's price action below.

BTC/USD Hourly (TradingView):

No market moves with the volatility of Bitcoin!

But with the community losing their mind over this weekend's Bitcoin pullback, I thought I'd write something from a rational day trader's point of view

Bitcoin Price Action

Bitcoin is a funny one, isn't it.

We love the ability for Bitcoin to rip your face off rally, but then we're for some reason shocked when it also pings back?

Surely we've gotta accept volatility works both ways, right? (Yes I know a lot of the beat up is from legacy media who write a headline to get clicks, which is a whole other argument...)

But really, when you look at the Bitcoin price action in this case, it's not even close to shocking. Instead, all I see is a simple reversion to the mean after a strong month long rally that culminated in a final rip into psychological resistance.

Healthy price action if you ask me.

If you're looking for further rationality in this weekend's Bitcoin price action, take a look at the levels we've been day trading around when Bitcoin first broke resistance.

Remember that forex markets are closed on the weekend and their Bitcoin CFD markets close along with them. Meaning we just get gaps where weekend price action would be.

BTC/USD Hourly (MT4 forex broker):

The beauty of trading support and resistance zones is that we only take trades in places where we know the major market participants are also looking to do business. This means there's more likely to be liquidity around these zones, leading to more rational price action.

From the rational day trader's point of view I said I'd take, this weekend's Bitcoin price action was highly technical and therefore predictable.

Why?

Because look where price pulled back to and look at how it's re-found support at the exact Bitcoin zone we had been using to manage our risk around.

We take it as the markets giving us a second chance to get long if we missed out the first time. But what's really happening here, is smart money re-loading their longs and getting real size onto their positions.

Best of probabilities to you,

Dane.



FOREX BROKR | Hive Blog Higher time frame market analysis.

Posted Using LeoFinance