Bitcoin Bearish Reversal Still In Play

What many traders and investors fail to realize is that price location carry probabilities. This means buy and sell signals can be assigned a loose probability which can offer a better guide when it comes to decision making.

Case in point, since the sell signal off of the 60K area, Bitcoin’s price has found temporary support around the 55K area and produced a bullish pin bar and a signal to go long (break of pin bar high). We had no intention of getting involved in that because the price location (mid 50Ks) was not favorable at all. Coming off a failed high and no price structure or stability means signals are 50/50 which is another way of saying random.

50K is the next historical support on the time frame we evaluate for swing trades. In order for us to share a new long idea, the price either goes to 50K and provides the proper buy signal, or it develops a clear supportive structure sooner followed by a buy signal. Developing a price structure takes time. One or two candles is not enough.

If the 50K support is taken out instead, then we stand aside as far as swing trades go and wait for the market to stabilize. The potential broad Wave 4 consolidation scenario is still a possibility that we cannot ignore.

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