Monday July 4, 2016 7:00 AM
Weekend/holiday or not, the way to trade the current pattern is this: If today closes green, you should not be short BTC. If today closes red the probability of more downside is very very high.
As mentioned in yesterday’s post, BTC started a strong drop in price yesterday from over $700 down to around $640.
Overnight, BTC dropped to $635, then a lot of that drop has been recovered with BTC trading around $680 with decent volume given how early in the day I’m writing this. This is setting up to be a clear reversal day.
So, the obvious question is: Is the current pattern showing a final backtest of $700 before we head towards $400 or is today’s reversal a confirmation that we’re starting on the path to $1000 and beyond?
As always, when it comes to trading successfully, it’s about probabilities, not certainties.
I’ve mentioned several times that full decision weight should not be given to weekend trading so I am looking for other clues over longer time frames. My strongest patterns and indicators say the bias is a moderate probability down. The big questions are:
FROM WHAT PRICE?
Meanwhile with the Bitcoin “halvening” due July 9 (date based on what I’ve read –here’s a helpful article on the subject from 2012 by none other than Ethereum’s Vitalik Buterin), it makes sense that short-term trading patterns just before this event would keep everyone guessing.
I started this post telling you my current trading strategy. More specifically, I’m looking at shorting BTC with a tight stop if it reaches the high $680s. However, it is a holiday and I don’t plan to sit in front of my computer all day to make this trade. I’m not too worried about it as I’m pretty sure I’ll get another chance to trade long or short BTC (and ETH) over the next week (or two) anyhow.
NOTE: NOTHING IN MY POSTS IS INTENDED TO BE TRADING ADVICE. Please do not base your trades on any information presented in the materials on this blog as it is for information and entertainment purposes only. You are 100% responsible for your own trading decisions.