Bitcoin Analysis - Long Trade Setup / How & Where To Take Profit
Hello Traders! Here is my analysis for BTCUSD.
First off just to update everyone, I was out of town for a wedding this past week which is why I didn't post. I'm home now so I will be back to my regular posting schedule! Alright on to the analysis...
Bitcoin has been holding up nicely over the past several days, finally showing signs of consolidation.
- What this means is that BTC is currently stabilizing and potentially preparing for the next move up.
- If you saw my last post about I spoke about BTC trading in a parallel channel. Being as this level has held the probabilities favor BTC trading in this channel for the time being.
- So until BTC confirms below the channel, the "Parallel Channel' thesis is valid.
So what does BTC hitting the channel mean for price action?
- The probabilities still favor BTC getting a large bounce.
- If you go back and look at each time BTC hit the bottom of this channel you will see that it got a large bounce.
- Remember trading is about probabilities... meaning, it's not guaranteed that BTC will get a large bounce like the other times but the probabilities do favor it.
- But now that we have seen BTC finally consolidate at this level, the probabilities of a large bounce have increased.
- So knowing this we can start to plan our next move...
How to trade BTC off these levels (Long Trade Setup)
- Since we are anticipating BTC bouncing, we can plan our next long position.
- The ideal level to buy would've been when BTC hit the bottom of the channel, but we can still make profits from where BTC is currently trading.
- As you can see on the chart, I have labeled a "Buy Zone". This is where I would feel "safe" buying.
- You can take profits at each one of the "Take Profit" levels I've listed on the chart. (Which are key resistance levels)
- Most likely I will be taking profits in 1/3 increments.
- Raise your stop loss to the "Take Profit #1" after that level is hit, repeating with each following "Take Profit" Level that is hit.
- You don't have to split up your profits if you don't want to but either way it's best to create a plan.
***In my opinion the maximum realistic price that BTC could hit during this bounce would be the "ascending trend line" at around $38K - $38.8K.
So personally I will take all profits by that point.
How to know if the trade is invalidated?
- As long as BTC is trading within the Parallel channel, this trade is valid.
- It could take anywhere from a few days for a few weeks for BTC to have a large rally, so don't get discouraged if it doesn't happen right away.
- Remember... Patience is key!
- If BTC confirms below the parallel channel, this trade setup is invalidated and expect further downside continuation.
***Important***
- Remember... the channel is down-sloping, so price could trend below support at $28.6K but still be within the parallel channel.
- Use the channel as Major Support for BTC
Thanks Everyone and Best of Luck Trading!!!
First off just to update everyone, I was out of town for a wedding this past week which is why I didn't post. I'm home now so I will be back to my regular posting schedule! Alright on to the analysis...
Bitcoin has been holding up nicely over the past several days, finally showing signs of consolidation.
- What this means is that BTC is currently stabilizing and potentially preparing for the next move up.
- If you saw my last post about I spoke about BTC trading in a parallel channel. Being as this level has held the probabilities favor BTC trading in this channel for the time being.
- So until BTC confirms below the channel, the "Parallel Channel' thesis is valid.
So what does BTC hitting the channel mean for price action?
- The probabilities still favor BTC getting a large bounce.
- If you go back and look at each time BTC hit the bottom of this channel you will see that it got a large bounce.
- Remember trading is about probabilities... meaning, it's not guaranteed that BTC will get a large bounce like the other times but the probabilities do favor it.
- But now that we have seen BTC finally consolidate at this level, the probabilities of a large bounce have increased.
- So knowing this we can start to plan our next move...
How to trade BTC off these levels (Long Trade Setup)
- Since we are anticipating BTC bouncing, we can plan our next long position.
- The ideal level to buy would've been when BTC hit the bottom of the channel, but we can still make profits from where BTC is currently trading.
- As you can see on the chart, I have labeled a "Buy Zone". This is where I would feel "safe" buying.
- You can take profits at each one of the "Take Profit" levels I've listed on the chart. (Which are key resistance levels)
- Most likely I will be taking profits in 1/3 increments.
- Raise your stop loss to the "Take Profit #1" after that level is hit, repeating with each following "Take Profit" Level that is hit.
- You don't have to split up your profits if you don't want to but either way it's best to create a plan.
***In my opinion the maximum realistic price that BTC could hit during this bounce would be the "ascending trend line" at around $38K - $38.8K.
So personally I will take all profits by that point.
How to know if the trade is invalidated?
- As long as BTC is trading within the Parallel channel, this trade is valid.
- It could take anywhere from a few days for a few weeks for BTC to have a large rally, so don't get discouraged if it doesn't happen right away.
- Remember... Patience is key!
- If BTC confirms below the parallel channel, this trade setup is invalidated and expect further downside continuation.
***Important***
- Remember... the channel is down-sloping, so price could trend below support at $28.6K but still be within the parallel channel.
- Use the channel as Major Support for BTC
Thanks Everyone and Best of Luck Trading!!!