This is a continuation of the falling knife series - last episode here:
As usual Part 1 is the big picture perspective. As we are get closer to the entry point, we start to look at the smaller time frame to prepare to buy in Part 2.
We were here:
We are now here:
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Buying opportunity is going to come in the next couple of days.
Current entry target is 6200 area. get ready to lock and load. I'm going to put full position in all at once.
This entry point can change (can get lower) it really depends when it tries to touch the bottom of the wedge. Lets give it 200 dollar room below entry point for our stops.
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Looking good, the corrective structure broke down and we are heading to the bottom of the wedge. Lowering buy limit order to 6150.
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upon closer analysis I'm moving my buy a little higher to 6180... it will probably dip a little lower than this, but I'm setting it higher so there is less likely to miss the trade if it occurs.
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BTC is not dropping fast enough im worried its showing strength that it will reverse before the bottom of the wedge. I want to see a strong breakdown to the bottom.
The plan is the same for now however...
If it reverses early on the upside we will enter the trade on the breakout (upper wedge) instead of a pullback. Its not ideal because the reward/risk is not as high but we will take what the market gives us. Stay tuned...
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there it is... half an hour after my last post about the upside breakout.
can't say I like this upside breakout but hey the market is always right.
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I got a question if it's safe to enter. Personally I will not enter this. This could be part of a bigger corrective structure (see below).
I would only enter if it breaks above the wedge.
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Okay as promised for the breakout play (plan B). We will buy the breakout when the upper wedge is penetrated (using a stop buy order).
We will set a stop right inside the wedge.
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If the price fails to break the wedge... this is what I'll be looking for...
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and if the price fails to even get to the upper wedge...
the plan is simple... we either buy the breakout from the upper wedge or buy the drop to the bottom of the wedge.
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looks like we had a failed break on the smaller time frames. note this is only 15 min chart, do not hold too much weight on it, but this price action is showing weakness.
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This rally is weakening, I don't see this breaking the upper wedge...
But just in case it moves up overnight, the current stop buy is 7050 with a stop at 6800 (initially).
Keep in mind the stop buy order get lower over time because it's a descending upper trend line, but for tonight this value is good.
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sorry typo. the stop buy tonight is at 7150 not 7050 for the breakout play.
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It's always good to look at the bigger picture.
This is what I would like to see.
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it's trying to break the upper wedge.
stop buy order ready, buy this breakout. Set at 7105
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it's struggling to break the upside...
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looks like down unless buyers is able to push it back into the structure which now acts as resistance.
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there it's trying get back in but the wedge is acting as a resistance now...
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This is a good short with a stop above the wedge. I will not focus on the short in this idea stream however.
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Aren't you guys glad you didn't buy or fomo into that. This is why it's nice to use stop buys on breakouts, you wait for the price to prove itself before you get in the trade.
This thing got as high as 7080.... our stop buy was at a TIGHT 7150.
absolutely! anything can happen in the markets.
And yes you are correct when the wedge breaks, it can trigger mass selling.
There are a lot of stop losses below this strong support... if it's penetrated, there must have been strong selling pressure (or news). and those stops loss points are reached, it triggers a chain reaction of selling which fuels the panic downward movement.
so if we buy at the bottom of the wedge, set a stop loss right away.
if the stop is hit - you just move on to the next entry at a small loss.
but to be honest I don't see this likely happening without a big unexpected news... We have a big support under this wedge, from the Feb low.
EIP-EverythingIsPlanned
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thanks for the detailed analysis; loved it
Remind
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@yshashmi37,
you are welcome
Cryptic_Insight
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this looks like a run to 6900-7100 then back down
nLucic
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What’s your recommendation? Is it safe to enter? That was a massive candle after hours of low volume.
Remind
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BTC is not dropping fast enough im worried its showing strength that it will reverse before the bottom of the wedge. I want to see a strong breakdown to the bottom.
The plan is the same for now however...
If it reverses early on the upside we will enter the trade on the breakout (upper wedge) instead of a pullback. Its not ideal because the reward/risk is not as high but we will take what the market gives us. Stay tuned...