Bitcoin (BTC) "Bear Trap" [Daily] Long

11 ott 2023

For this trade to be in play, Bitcoin still needs to drop about $2,000. That said, we hope BTC eventually trades down below 25K. This setup is considered a “bear trap” because traditional support/resistance traders are likely to be watching/sell a break below the 24756 low which printed on 6/14. Despite what traditional technical analysis suggests, making a bearish bet below 25,000 is not a probabilistically attractive setup. Clear evidence of willing buyers exists in the form of daily demand @ 23940-24745. If Bitcoin continues to trade lower, which seems somewhat likely given that current price falls within a large range of “filled orders” (denoted by white rectangle on right chart + not indicative of material price imbalance), we will be stalking buys below the mid-June ’23 low. If downside momentum is very strong, consider watching refining/micro timeframes for reversal signals before entering; catching a falling knife is never a good time! This buy idea is further bolstered by the Anchored VWAP, which, when secured to the pivot low from 11/20/22, coincides with our demand.

Regarding profit targets and stops, consider using the respective supply zones (in red) south of 28000 and north of 29000. Ultimately, we’re looking for a bigger move in BTC/USD (see thicker red supply zones 35000+). For stops, you can either use a % of the width of the daily demand zone or look for LTF demand within the expanded range candle from 3/12/23; in another charting platform, which we use for our primary work, we’ve ID’d a 15-minute insulating zone 23425-23671. Placing stops below this area would, of course, increase the amount of capital risked, but potentially reduce the probability of a premature stop out. Trading is a very personal undertaking, so be sure to trust your individual trade plans/parameters regardless of the above ballpark suggestions…

Hit us with any questions or comments you have. Hope this helps!

Jon @ LionHart Trading