Not easy this little market in the middle of the Bear-Market. Always wondering whether to buy or not, whether to wait to go lower or not. Especially since the global economy is not improving the situation, between inflation and geopolitical risks in Asia and Europe in particular. There are a lot of risks associated with taking a short-term position. But wouldn’t someone who wants to start a long term portfolio be better off starting it after a big -70%? Mmmmh I’ll let you answer that!
Disclaimer: This article does not constitute investment advice or an invitation to invest. It is strictly for informational purposes only. You are solely responsible for the trading and investment decisions you make.
Recent Bitcoin Price Action
As a result of the FOMC (Federal Open Market Committee) continuing to raise rates until inflation finally begins to stabilize and then decline (laughing), the price action has stabilized very close to its lowest point since early June 2022.
The feeling that comes over you when you get very close to lows like these and say to yourself, I have to sell and go short (for the crazy among you). However, being rational and relying only on price action, you should be long and not short. So what should we do according to our profile?
Short term VS long term
We have to differentiate between a short term trader and a long term investor/trader.
Indeed, a long term investor will invest on a support, here we are on it. Of course, the price could break this support and send us towards $16,000 and then $12,000. However, as the investor is seasoned, he knows that he should not go all in (= buy all at once) on a point, this will allow him to invest again if ever this price comes down!
The short term trader will certainly wait for a reversal pattern or at least a momentum indication (RSI / MACD / etc) saying that sellers are having trouble pushing the price down. In a range, when you are close to the low points, it is better to buy and put a limit order to close the position in case the price falls than to short.
The basic rule for a trader is to never short a support or long a resistance!
My opinion on BTC
For the long term, we are on a support. I said it all Billy!
On a situation like this I prefer to buy at $19,000 rather than $25,000. Well I admit it would be even crazier to buy at $12,000, (wait and see ?)
For the short term, it seems that the price does not break the support violently. This is for me an interesting indicator of a positive price action. Indeed, during the last falls, we did not have respites and “attention the price will fall”. The falls are generally violent and do not leave time for reflection.
Another very positive point from my side is the beginning of the appearance of divergences.
Whether it is on the RSI or MACD, we can observe that even if the price makes daily lows, the indicators do not. This is characteristic of a loss of strength by buyers. These divergences are not validated, however, they do bode well.
In short, you will have understood, until proven otherwise, i.e. the break of support, I am rather on a buy than sell position despite the current economic situation. We’ll see you next week for a review of what happened! Of course Coinpri and I are not giving any investment advice here, just my opinion based on a chart analysis! See you next week!
Entrepreneur & Dad, passionate about cryptocurrencies, I describe for you the technical analysis. Cofounder of Cryptocademia, a free platform to learn all you want/can about blockchain ! Meet you there at https://www.cryptocademia.com
My job: look at charts and interpret them for you.
Beware, I do not know all the truths.