Bitcoin – No Reason To Sell – Looking to Add

Overview:

Even as bitcoin continues to move higher in a steady but stable move, many are still calling for locking in profits.  However, they have been saying this for weeks and are now sitting with empty bags, looking and hoping there is a fire sale.

We mentioned months ago that this is how the bull market will evolve.  Those who waiting for a pullback at 6k got it, but  were afraid to step in.  As Bitcoin starts to grind higher, they will continue to wait for a pullback.  Though even if Bitcoin does pullback, they will once again get cold feet, question if this is the time to add, wait for lower prices and watch as Bitcoin reverses and pushes new highs.  

With so many retail investors and traders waiting for a pullback, selling their inventory they bought, if they bought, at previous lower levels, who do you think is doing all the buying here?  Who continues to accumulate in the face of so much resistance, so much pessimism as short interest continues to climb?  You think it is “that guy” on facebook and Trading View with more color on his chart than a 8 year old art student? Probably not, it is institutional and larger operators that are the likely culprits, or what the street considers “Smart Money”.

The reason they consider them “Smart Money” is because they have access to information we do not have, yet we are getting a sneak preview of why they might be adding, and this is simply being frosted over with a bunch of Bitfinex FUD.     

Stick With The Trend

Though we are approaching the 6k psychological and technical resistance level, there seems to be little if any price rejection so far.  This is surely an area where the market is vulnerable to a pullback, but it is also vulnerable to a breakout and swing higher as well.  So far Bitcoin has simply ignored resistance, consolidated and moved higher.  

As we mentioned on the podcast yesterday, we have a series of higher highs and higher lows, not only in the broader perspective, but in the shorter term as well.  Quite simply the chart is still printing strong candles and any selling, ever so shallow, have simply been absorbed by the market.

This is why we had no issue stepping in around 5150 when everyone was hitting the sell button and buying us some Bitcoin.  The chart is simply still strong and until it shows weakness we will remain long.  This is simple, stick with the trend.   


Bitcoin Weekly

Over the past 12 weeks we continued to see higher lows on the weekly chart.  There were some points of consolidation, but the trend of forming higher lows has remained in tact.  Technically the 6400 level is the area to look for signs of a pullback, but between 6000-6400 there is major resistance.  

This is still the third leg of a broader move in my opinion, and I am not going to sell an early 3rd wave.  I am looking to add on a pullback and reversal for a 5th leg swing higher.  It is that simple, nothing more nothing less.  

Until we see some signs of a top, the trend line is our guide for levels of interest, which is down around 4650.  This would be a radical selloff, and if we see one, I will be looking to add aggressively.  The more likely scenario is we pullback into the high 4800’s or low 5k’s.  Many will be looking to buy back the coins they sold there, which will be a range of support, if we get there.

Over the next few months we are looking for a move into the mid 8k’s or even the initial resistance level around 9700.  This is our initial target and we will adjust as the market plays out, but regardless we have a plan.  While many are focused on short term wedges, diverging moving averages and cross-overs, we are focused on the flow of money. 

Clearly the flow of money is to the buy side!


Bitcoin Daily

In the short term the 6000 level is going to be an area where we likely see more longs cover.  The key level here to take out is 6100 which is the 61.8% extension of the previous swing.  If it can clear this level, 6500 is clearly on the table, and a short squeeze could take us higher than this.

I like the 4900-5200 as an area to look for longs, but technically we can pullback to the 4600 area.  We can not discount this, but we will be looking to take action.

This would complete a shorter term 4th wave and sets us up for one leg higher, which is in line with our weekly chart.  This is the leg I want to be adding to, but also looking for a potential swing or position trade.  Since I added at 5140 I would like to get that cost down and one way to do it is with a position trade.

Yet when and if we get there many will still have cold feet.  So they will be looking for crap coins they can buy a bunch of at little cost.  Most of these coins are going to zero, and you are best putting your sweat equity in a major coin than a crap coin like TRX.  

TRX

TRX

Let’s just say Tron has been shady from the start, but wow they do some good marketing.  Fake Tesla giveaways, Tether (also controversial) supposedly launching a new version of Tether on the Tron Blockchain, it is more like a version of Gotham with the Penguin and Fish getting together for some charity. 

Yet those still hoping to hit homeruns buy into hope.  If you strategy is hope, your investment plan is hopeless.  I read somewhere that more retail investors own alt coins than they do Bitcoin.  However most funds that invest in the space are overly weighted Bitcoin, many over 60-70%. 

Regardless TRX and many others look like total crap, down 30% off its April High, where Bitcoin and others are pushing new highs.  Now maybe TRX becomes the next something, but with all the controversy surrounding it, we are just not interested.  We own a few alt coins, but our goal is to own them for free, so we do not hesitate at taking our capital out when we can.

 

Summary

There is simply no reason to sell here, other than if it was a dedicated trade with a target.  But for the long term investor I would and will be looking to add.  Matter a fact there are four (4) fundamental reasons to add, TD Ameritrade, E-Trade, Fidelity and BAAKT.  Those seem to have been lost in the FUD of Bitfinex.

Not that we can not pullback here, and it is still possible to push into the low 4k’s.  In my opinion this will be a great opportunity, but most will get cold feet as they are overwhelmed by the hooplaa around them, confirming their bias that Bitcoin is going to retest the 3200 low.  Even if it gets there they still won’t add. 

Nobody knows what might happen in the short term.  However in the long term it is my belief that we retest the previous highs at minimum.  With the structure clearly that of an initial recovery I will be looking to add on any pullback.  It is that simple, I am not trying to buy the very bottom, I just want to buy low and I am happy with that. 

In the end is it those guys on trading view with their prophecies and predictions, or that guy on Facebook that continues to post “Lock in Profits” with every 300-400 pt move that is buying here?  Nope it is smart money most likely, and this is why any dip in my opinion is a buying opportunity.

And for God’s sake don’t load up on cheap coins, they are cheap for a reason.  There will be few that survive this next bull market and you are likely going to be better off owning 0.1 Bitcoin than 100,000 digital pieces of crap.   

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2 Responses
    1. Andrew Gonci

      Thanks Matt, depending if it takes out the low it could be considered a double top, for now it is just range bound. Just have to see, how it unfolds. I am not a fan of TRX as you can tell 😉

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