Bitcoin

Bitcoin Pull Back Still To Early For Longs.

This lack of bullish momentum may lead to a continuation of the recent bearish structure since the 40K support break. Even though there is a double bottom around the 30K area, it is still within reason for this level to be taken out over the next few days.

Two important points to consider: First, we chose to avoid the recent buy signal because the RISK is too high. The average risk in recent swing trades has been between 3 and 5K. The size of the recent bullish candle off the 30K low is about 8K points. If we got long around 39K, the price would have to run to 47K to justify the risk. The chances of reaching such a target to justify 1:1 risk are much lower NOW.

This brings me to my second point: The 40K level was a short-term trend support. This means in order to anticipate the bullish trend to continue to new highs in the near term, this support had to be maintained. The fact that 40K has been compromised means we adjust our short-term expectation from bullish to range-bound.

In recent videos, I have talked about the potential Wave 4 consolidation. Such an environment is often filled with false starts, false breakouts, and a lot of noise. Similar to XAUUSD from the August peak, it can persist for many months. This means we adjust profit and risk expectations and place more emphasis on the range low for opportunities (which is 30K at the moment). MOST altcoins will likely follow.

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