Choppy Action for Bitcoin … but likely to change

Well the rally of the past week went just far enough to stop me out of my short position at breakeven before turning down again.

The pattern now forming shows a failed breakout to the upside which held for a short while before turning back down to re-test the lows of 2 weeks ago.

While I always try and remain objective and be driven by the chart action; sometimes you just can’t help but be driven by an underlying feeling of the market.

In this case, unfortunately, the market feels saturated…I can’t think of a better word to describe it. It seems to be falling under it’s own weight. Lacking any upward impetus on a rally and too eager to fall when the market stops rising.

This is in stark contrast to the last few months where the market would rally, pause for breath and then have no difficulty resuming the move to the upside.

While this isn’t overly surprising, given the rise we’ve had in bitcoin over the past 6 months it is still a reason for caution and, as a trader, a reason to play this market, at least for now, from the short side.

I’ve no re-established half of my short position at 2295, below the low hit on the 2nd July. I will add to that position if we break below 2200, the lows established late in June and then build to a full position if we break below 2040 (mid June lows).

On the upside I’ll stop myself out of my short position if we go above 2600 and look to establish a long position if we can hold above 2650.

Good luck and good trading.

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