Bitcoin Has Broken Important Support
...And a few trade updates.
Traders,
Just want to keep you up to date on important Bitcoin price action. As of today, we have broken my all-important trendline. If you’ll remember, I said that once we do this I will look to start offloading risks. Thus, I sold my degen play BAG (which actually did fairly well at holding its own during this plunge) and I sold SHDW (more below). I will be back to both of these in the future I am sure, but for now, I’ll stop playing with fire.
BTC has not confirmed its breakdown as of this post. We have 2 hours to close on this candle and then all day tomorrow. So, this could be a head fake but there are a few reasons why I don’t think it is.
First, the stock markets are still on their way down while the dollar, vix, precious metals, and commodities continue to rise. This trend continues and has a little ways to go before it turns. Likely, Bitcoin will follow. I see no reason to believe that it won’t even with all of the ETF demand (now Hong Kong).
Also when you look at that triple-top pattern that BTC has formed, some are claiming that is a Wyckoff distribution pattern. If so, my multi-year trendline which is currently acting as support, is also a support in this pattern before we’d enter into Phase E (see below).
Then scroll up to that Bitcoin chart again and look at the RSI. It has broken its trendline. Could this be a foretelling indicator? We’ll soon find out. I think we should know by the close of tomorrow’s candle.
There are other bearish clues and indicators but there is no point in discussing all of them when tomorrow’s candle should give us as much as we need to know about the further direction of Bitcoin. If we remain below that trendline I think we could go as low as 50k on Bitcoin with a wick as low as 48k.
Again, I will probably offload more risk upon tomorrow’s candle close, the confirmation candle.
Now let me talk about the two alts I just sold and why it made sense on their charts to sell as well.
You can see on the SHDW chart above that price ran into a solid area of confluence overhead where that blue trend line intersected the vrvp’s point of control. This would be hard to beat even in a bull trend. Shadow has the possibility to drop to as low as .60 cents if trends don’t change soon. I’ll be a buyer again here for sure or if it broke to the upside of one of those overhead resistance trendlines.
BAG was my degen play. No need to pull up a chart on that one. The simple truth is that I rarely take a stab at meme tokens like it, but when I do, it should only be during a bull phase. I certainly shouldn’t be hodl’ing meme coins while the market is crashing.
Hope this helps.
Stew
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