Bitcoin price goes vertical and reaches both profit targets for our official swing trade from 10,150 and for our alternate trade taken at 9685. And NOW the online communities are all calling for longs as price pushes into the next resistance zone, which hardly offers any attractive reward for the risk taken. This is the nature of all financial markets, they serve as a mechanism to transfer wealth from the ignorant to the savvy. Now that we are out, we simply WAIT for the market to answer the next question: is this the beginning of the next Wave that can push to new all time highs?

Herd Mentality Making You Anxious?

Are you noticing a pattern yet? When the chart looks ugly and is pushing lower, the herd spreads their extreme bearish predictions. And when the price goes vertical, the same experts completely flip to extreme bullish predictions? Is your performance being affected by these reactionary views?

Our followers had the benefit of receiving our swing trade ideas WEEKS earlier, and have profited from the herd mentality rather than being robbed by it. Our official long was from 10,150, while we also shared an alternate trade idea at 9685. Both trades reached their respective targets and we are now out of the market as far as short term swing trades go.

Have you heard our podcast? We broadcast every Monday at 4:05 PM EDT. We cover everything from Bitcoin trades, investing in stocks, forex ideas and even physical metals. Visit our library and listen to previous episodes HERE.

Bitcoin: Targets Reached After 3 Weeks.
12K area does NOT offer reward/risk that is attractive.

As I have written in previous articles, the road map begins with Elliott Wave. We anticipated Bitcoin would go into a broader corrective wave structure once the 5 Wave impulse was complete. And the market complied after peaking at 14K.

While the reactive herd population is now excited about Bitcoin again, there is nothing structural that says this market is out of the Wave 2 corrective consolidation. This means resistance levels still carry weight and are more likely to hold.

The next RELEVANT resistance zone is the 12K to 12,850 area. This is a REGION where selling activity is more likely to appear. Price can gyrate around this area or even go a few hundred points higher while still being affected by it. This is NOT an area where we want to be long as far as short term swing trades.

The probability of a broader fake out is very high UNTIL 14K is decisively cleared. A break to a new high will signal that the broader wave structure is more likely a Wave 3. As you will notice, price would have rallied 5000 points off the 9K low in order to prove this.

This is why it is a good idea to run multiple strategies. We have been carrying inventory since April of 2018 and have improved our average price into the 6Ks since then. This is SEPARATE from our swing trades. If Bitcoin is in a Wave 3, we will benefit from the entire move. This is what buying wholesale and selling retail is all about, but requires a LOT of patience, and very careful sizing.

For newer investors, you can start accumulating inventory at any price. The key is to understand your location and size proportionally to your available capital. For example. buying 11,750 is NOT the most attractive location. This is where professionals sell and retail traders buy.

If you really want to own some at such levels, you start very small. Let’s say you have 5K to invest, so you purchase $100 worth, which means you still have $4,900 left to invest at better prices. Does that make sense?

If Bitcoin exhibits an extreme retrace back to something like 9500, now you have better prices and can afford to take a slightly larger bite, like $150 worth. You will NOT show impressive returns over night doing this, it is a slow and gradual process that aims to capitalize on wholesale prices.

It is NOT about WHEN the market will retrace, it is about IF that opportunity presents itself.

Return To The WAITING Room.

Investing is a completely separate strategy and should not be mixed with or confused with short term market timing like swing trades.

As far as swing trades go, we are back in the WAITING ROOM. Either this market pushes a new high (14K break out), or it reverses in the 12K resistance area and probes for a support level somewhere above 9K. The retrace scenario is the more likely one based on the current wave structure.

In order for our swing trade criteria to be met, we need to see a support level, perhaps around the 10K area and a reversal pattern. Or a break out followed by a continuation pattern. Until one of these outcomes unfold, WE WAIT. Whether this market runs away or not.

Waiting is probably the number one tactic that has lead to our positive performance in this space since January. Having a clear set of criteria and a process for taking these trades are what provide a predefined scenario to wait for.

If you do not know exactly what you are waiting for, then it becomes much harder to find the patience. And you will be more likely to react to the wrong information.

I would like to point out, that not once have I mentioned any geopolitical drama, Chinese Yuan manipulation, or any other irrelevant information getting major attention at the moment. Meanwhile we were positioned 3 WEEKS AGO. What does that teach you about news, free internet “gurus” or other financial entertainment?

Imagine you have an important meeting, and you have to take a bus to get there. You are not sure which bus to take, or what time it may come, but you see a bunch of people getting on one so you get on anyway. In reality, you probably would not do this, so why do it with your money?

Questions and comments welcome.

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8 Responses
  1. Quang Thai Pham

    Hi Marc, You write about alternate at 9685, but I did not receive it. Was it for swing trade member only? ( I have subscribed the premium member and how can I register as a swing trade member more?) . Kindly check it, thank you

  2. alexander katz

    Great article! Really appreciate the specific example you gave in the context of someone completely new to the market (starting with $5,000 in capital), as well as clearly delineating when you were talking about a swing trade strategy vs long term investment.

    Any thoughts on the consistently increasing bitcoin dominance? The “herd” seems to be either celebrating the complete demise of alts (or mourning it) but that just makes me want to buy a bunch of alts…

    1. Marc Principato

      Thank you Alexander. To answer you question about dominance, I do not have any opinion. I follow the charts only. If Bitcoin dominance is going to increase, the chart will tip me off. And the only attention I pay to the herd’s opinion is for contrarian purposes only. The problem with the alts, is they continue to show evidence of relative weakness to Bitcoin. As long as money is NOT flowing into them, I am not interested in them. Most of them have not proven themselves, and until they can, I expect most of them to go to zero. And the proof I am talking about is through price structure on a chart.

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