Welcome to this weekly series from the TradeRoom. My name is Dave and I’m the founder of The Crypto Den, an Australian-based crypto trading and education community aiming to give you the knowledge to take your trading game to the next level.
Crypto Market Outlook
BTC finally retested the all-time high from 2017 and from here it’s very simple: we either confirm a new floor or break through it to US$12,000.
For the US$20,000 level to be confirmed as the bottom, it takes more than just a few candles. We need to see solid market structure with volume behind it. This will take a little time for the market to produce, and could take days or even weeks.
Once again, however, my opinion is we have more red to come (sorry! I know it’s been six months of bearish bias!). That said, we may see a relief rally to around US$28,000 and should that happen I plan to add to my short position and perhaps we visit US$12,000. If we don’t get a pullback in PA, then I’ll continue to ride my open shorts.
I still very much believe the entire bear flag I wrote about on April 11 will play out to the end at minimum. And dare I say we may even go further if the world economic climate doesn’t see a vast change in the coming months. How does buying BTC at US$6,000 sound?
Even if we zoom in on the 1H charts for our day traders, we see a failure to break and hold above 100 EMA confluent with the peak of a 1H rising wedge (bearish candlestick pattern).
This Week’s Trades
Because I still have a bearish outlook on the market, entering long trades or buy orders on ALT coins is high-risk and short-lived. So instead, what I’m looking for is ALTs that have seen a significant pump and in turn yield higher percentage gains if the market dumps again. Remember, you can still make serious ROI in a downtrending market.
Setups similar to the below chart of SNX is what I’m looking for – a clear retest and rejection from a new level of resistance (previously support). There are a few ALT setups like this already in play.
To enter before BTC decides if it’ll dead-cat bounce has higher risk and far more aggressive entries. Best practice would be to “wait and see”. If BTC pulls back – find entries. If BTC doesn’t – do nothing.
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