Bitcoin: 50K Reject Implies Strength?

50K holds as resistance so far which is expected. What needs to happen now is 1) price rejects the resistance area (trying to now) or 2) bullish momentum follows through taking price into the 53 to 55K area. How can we accurately foretell which way Bitcoin will go? The more effective question to ask is WHAT IS AT RISK?

We shared some swing trade ideas when the reward/risk was attractive in terms of price structure and location. The 30K SUPPORT AREA and the 41K break out. The RISK of retrace within the 50K RESISTANCE area is HIGH which means it is NOT a good time to assuming new risk. If anything this is a time to be locking in profits on a portion of your position that you entered at much lower prices. Again this is from the swing trade perspective.

As far as new signals. there is nothing compelling here. Even if a long signal developed, the RISK of the location is too high. The first support is around 44K, and you would have to babysit the position in case it fakes out. I realize there is a LOT of hype that appeals to your fear of missing out, but hopefully by now you have at least learned that listening to others on the internet is not an effective strategy. The chances of Bitcoin pushing to 64K over the next few weeks at this point is still low. That can change, but structure has yet to prove anything.

The good news for the bulls is: usually a rejection from a level is fast. Price continues to linger at the resistance which implies strength at the moment. A bullish continuation pattern can develop here, but the risk of it faking out is high. Taking such a trade really should depend on your experience, risk tolerance and attention.

As for the bears, shorting here only offers an attractive reward/risk. There is no other reason which often means it is too early. Our strategy prevents us from shorting Bitcoin so it is not a concern for us anyway. The bear argument would be much more compelling AFTER minor supports are cleared (like 47K).

High probability swing trades are not something that come along every day. Anyone can read a chart and claim to be a guru, call trades and look "smart" thanks to the random nature of the market. A good trade begins with a quality idea, and that idea is derived from QUALITY information. Most of the time, people are focused on the wrong information while simultaneously motivated by FEAR. Change your focus from "greed" to "preserve capital" and you will at least minimize the effects of succumbing to human nature and being at the mercy of the market.

Thank you for considering my analysis and perspective. I hope you find it helpful.