Bitcoin: Further Retrace To 39.5K?

13 feb 2022

Bitcoin probes the 45K area resistance and after all of the usual "authorities" call the next bull market, price pulls back. Were you lured into buying this in a low probability area? Are you stuck now in hope mode? Let me be the first to welcome you to the herd mentality. In this article, I am going to briefly outline only ONE of many price scenarios that can play out over the coming week.

In my previous article, I specially pointed out the 42K AREA is a location for selling activity is more probable. There are technical reasons for this, and even though there is no way to assign a precise probability percentage to this, it was CLEAR that the RISK on the long side was HIGHER. If you look on my chart, I have a number of blue horizontal lines that serve as a reference for the resistance zone. Over the previous week, (along with the S&P), price has rejected this zone. This piece of information is very importing when it comes to ANTICIPATING what is likely to come next.

My assessments utilize specific pieces of information gathered from what you can SEE on a chart. These pieces of information, when viewed within a specific context, offer insight into what you CAN'T SEE. In other words, I am identifying locations where price is likely to behave in a particular way in ADVANCE. IF price reaches such an area, based on its behavior there, I have preset expectations, can better manage risk and can adjust if things go the wrong way. In this way, I am able to separate myself from "reactive behavior" which is typical of the herd mentality.

Based on the price action now, Bitcoin has established resistance around 45K. While it is possible that the short term structure is transitioning from bearish back to bullish, until the higher high is in place (push beyond 45K), the current structure favors a retrace to 39.5K where a higher low can develop over the coming week. This higher low, followed by a specific candle reversal pattern can offer a high probability swing trade long signal. That is ONE potential bullish scenario that I am WAITING for.

IF 39.5K support breaks instead, that would confirm the recent structure is either bearish or range bound. A test of 35K to 30K would be more reasonable to expect in this scenario.

The reason why most people struggle with markets has to do with flawed expectations which are further cultivated by loads of misinformation. If you come into this market thinking there is a way to win, you are now at the mercy of the herd mentality. If instead you come to the market knowing that it is random and that 99% of information available (especially free) is there to stimulate fees, you are in a much better position to win because you will be defensive and aim to protect capital. If you enjoy being lied to, then please ignore everything I just wrote.

We think of casinos as an emotionally charged fun and exciting place filled with the hope of winning but if you don't win, hey it was fun anyway. Casinos are an enjoyable place to be robbed. The infrastructure setup around financial markets (gurus, vendors, exchanges, etc.) are set up to profit from the "hope" that comes along with the emotions connected to making or losing money JUST like a casino. Understand the game from the casino perspective, NOT your own personal situation or experiences. As retail traders our accounts are potential profits for others.

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