Bitcoin continues to confuse. Is the 7800 resistance a lower high? Is this market trending lower? Isn’t this space fundamentally growing? As a short term trader, I am only interested in the clues offered by the order flow itself, not the hype and drama that constantly swarms around this market. You can argue that a lower higher is in place which should technically lead to a lower low, but what you must not forget to consider is the context of the broader location. In my brief video I highlight levels that need to be taken out in order to increase the likelihood of particular bullish and bearish scenarios. The market must choose, then we adjust.

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Short Term Ugly, But Bigger Picture Is A Different Story.

Key Points To Consider:

1. The 7275 to 5464 support zone is still in play. Although short term price action can probe lower, the broader location still favors a broad bullish reversal. This can take weeks to unfold, not hours.

2. A close below 7K will likely lead to bearish momentum and test of the 6550 reversal zone boundary. This level is proportionate to the recent bullish swing that tested 10,300. This area is where a chance of a fake out and bullish reversal is the highest.

3. IF price breaks and closes above 7800, bullish momentum is likely to lead to a revisit of the 8500 resistance. A close above that, and the 9Ks are back in play. Our swing trade profit targets are between 9K and 10K.

4. Bearish and bullish fake outs are more likely in this RANGE BOUND environment. A break of 10,300 will confirm a new broader trend is in progress (Wave 3).

5. The corrective structure from 14K to 6800 is a broad higher low consolidation of the 3150 to 14K move that took place earlier in the year. Although very short term price action may appear to be bearish, as long as no dramatic lower low is established, selling into lows is high risk proposition.

6. Any revisit into 6K area presents a long term opportunity since we consider these “wholesale prices”. This is where we look to add to our inventory, which is NOT the same as the short term swing trade that is currently active.

I realize investors and traders prefer “predictions”, especially if they are accompanied by a good fundamental story. Timing markets, particularly on the short term is the furthest thing from such ideas. Short term market timing begins with accepting the fact that markets are driven by SENTIMENT.

And technical analysis offers a way to evaluate, measure and compare such sentiment through the clues that express themselves as repetitive patterns. There is no “predicting”, instead there is gauging probabilities and adjusting as new information comes to light.

Questions and comments welcome.

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