Good morning traders. Price had a minor setback yesterday. After popping up $360 to a high of $9096.79, just $100 shy of the immediate 4H R1 pivot target, price dropped down and bounced off $8000. However, it did hit the TR target (height of the TR added to the point of breakout) and then some. This is exactly why I have been warning traders to consider not trading in this area. The lack of liquidity as a result of cyclical accumulation that occurred last year, as well as price nearing the end of its bullish run, makes volatility like this a strong reality and most retail traders don't have a clue how to trade it. I have talked time and again about locking in shorter term profits if a trader insists on entering and trading this range. Lord knows I am constantly preaching risk management. Yet, even with all of this, I still get the idiotic comments about "newbs are rekt because of you." Make sure you understand, if you are getting rekt in a financial market it is absolutely nobody else's fault but your own unless they are trading for you. Furthermore, if you choose to ignore the warnings about market conditions in this area and risk management that I have provided, as mentioned above, then you truly have no leg to stand on. I am never rude, but I am direct and trading requires that you take responsibility for your actions (it's part of being an adult). It's absolutely ridiculous that I need to speak to adults about taking responsibility for their own actions. Consider this your reality check. So, now that I've gotten that out of the way...
In the grand scheme of things, in spite of the whole of cryptotwitter turning mega bearish yesterday, all that really happened was that price returned to previous resistance and tested it as support while bouncing out of the demand zone in blue as the daily bearish divergence I mentioned was printing played out. Furthermore, we can see that it took supply more effort and produced less result to get there than the large demand candle leaving the blue zone on May 26th. Large, sudden drops like that are often initiated by professional traders attempting to scare retail into selling them their assets. Guess what? It worked. Nothing that has happened gives me reason to believe we will be dropping below $8000 at this time. Now that can change as new information comes in (i.e. price action and volume changes) but it seems more likely than not that price will return to the previous swing high and continue its trek toward $10,000. Interestingly, you may remember that I spoke recently about a possible push to $10,000 followed by a sudden drop toward $8500/$9000 and then a push through the $10,000 level -- basically, what we just saw happen yesterday. It is possible that this grab for liquidity and scooping up of retail's weakly-held assets was that move, just $1000 lower.
For now, my immediate target is $8700. This will bring price right back to midrange of the shorter TF blue TR that price fell out of yesterday. Reclaiming that level will have price back above the 21 EMA and should have it targeting the top of the TR at $8939, followed by the swing high at $9096, and then the higher targets through $10,000 that I have mentioned previously. The 4H RSI is slightly bearish at 45, but is curled up suggesting increased demand momentum. The 4H Stoch RSI has recently bounced off the bottom and crossed bullishly while still in oversold. This suggests that demand strength is just starting to build which should lead to the higher prices mentioned above.
Contrary to what cryptotwitter says, this type of analysis doesn't make me a permabull, rather it is just a reading of the market. I reitterate, what happened yesterday was just a blip in the slightly larger picture. However, most retail traders will feel differently because they are not looking at the bigger picture, they aren't practicing intelligent risk management, and they have little-to-no understanding of what's even going on in the market. The market is not bearish and a correction in a bull market is not bearish. The sooner you can learn to leave the words "bull" and "bear" out of your thoughts and usage, the sooner you can become less emotional in the market. The use of emotional language necessarily leads to increasing emotional response. Trading is a psychological game of composure and those with the least emotional attachment to it are the ones most well-positioned to win at the end.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
In the grand scheme of things, in spite of the whole of cryptotwitter turning mega bearish yesterday, all that really happened was that price returned to previous resistance and tested it as support while bouncing out of the demand zone in blue as the daily bearish divergence I mentioned was printing played out. Furthermore, we can see that it took supply more effort and produced less result to get there than the large demand candle leaving the blue zone on May 26th. Large, sudden drops like that are often initiated by professional traders attempting to scare retail into selling them their assets. Guess what? It worked. Nothing that has happened gives me reason to believe we will be dropping below $8000 at this time. Now that can change as new information comes in (i.e. price action and volume changes) but it seems more likely than not that price will return to the previous swing high and continue its trek toward $10,000. Interestingly, you may remember that I spoke recently about a possible push to $10,000 followed by a sudden drop toward $8500/$9000 and then a push through the $10,000 level -- basically, what we just saw happen yesterday. It is possible that this grab for liquidity and scooping up of retail's weakly-held assets was that move, just $1000 lower.
For now, my immediate target is $8700. This will bring price right back to midrange of the shorter TF blue TR that price fell out of yesterday. Reclaiming that level will have price back above the 21 EMA and should have it targeting the top of the TR at $8939, followed by the swing high at $9096, and then the higher targets through $10,000 that I have mentioned previously. The 4H RSI is slightly bearish at 45, but is curled up suggesting increased demand momentum. The 4H Stoch RSI has recently bounced off the bottom and crossed bullishly while still in oversold. This suggests that demand strength is just starting to build which should lead to the higher prices mentioned above.
Contrary to what cryptotwitter says, this type of analysis doesn't make me a permabull, rather it is just a reading of the market. I reitterate, what happened yesterday was just a blip in the slightly larger picture. However, most retail traders will feel differently because they are not looking at the bigger picture, they aren't practicing intelligent risk management, and they have little-to-no understanding of what's even going on in the market. The market is not bearish and a correction in a bull market is not bearish. The sooner you can learn to leave the words "bull" and "bear" out of your thoughts and usage, the sooner you can become less emotional in the market. The use of emotional language necessarily leads to increasing emotional response. Trading is a psychological game of composure and those with the least emotional attachment to it are the ones most well-positioned to win at the end.
Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life.
You can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.