Bear trap cont'd - What to watch for next signals
Continuing from my previous post about the bear trap trade. It's important to note that my current trading strategy is to stay in our longs from that bear trap post and ride profits, I will swap coins and bounce around as I see fit but I'm not here to day-trade and bounce in and out on 5 minute timeframes. I don't often post prediction targets or things along that line because I don't care for them, I much prefer to take data as it shows up and move accordingly. So with longs currently in action, here are the major charts and ideas that I am keeping my eye on.
Bitcoin dominance is in a rising wedge, statistically this should break lower. Most bullish moves in this market start with bitcoin getting the action, followed by altcoins running for some time. BTCd is typically a good indicator of that happening and it overlaps well with the current market structure. To make this extra fun, I added a time fib shown on the chart which can often get very close approximations of when a pivot in price action will occur. If that ends up playing true, I'd expect that time fib to mark the next high that BTC.D prints before breaking lower. Again, I don't like to predict but this is for fun while we watch the rising wedge do its thing.
TOTAL2 is the next chart. I've been watching this falling wedge and its finally broken out with our BTC bear trap trade. So the things to observe on this one are the major support/resistance levels marked. Because we are just trying to stay in our longs until told otherwise, I pay special attention to the strongest levels. These essentially serve as a way for me to tell myself "Hey, there is a lot of resistance here, go check BTC and other major market coins to see if they are printing a bearish pattern". These levels also serve for me to know when to identify market weakness. If support is broken but then fails a retest and actually breaks under the support level, I will use that as a sign of weakness (sort of a bull trap) and exit with profits. And one piece on here for fun in the measured move of the wedge, which happens to overlap very nicely with strong resistance. I'll address the orange vertical line at the end of this.
TOTAL3 uses the same exact ideas as TOTAL2 above. I'm only showing it because this is an instance where this one still needs to breakout. So use the same ideas discussed in the previous idea for this chart as well as this is what I use for tracking the smaller altcoins that I trade.
DXY shows the same ideas but inverted. When DXY performs poorly, stocks and crypto do well. But DXY hasnt broken anything yet. So I'm using this rising channel as a method to tell myself "hey, the lower trendline got hit, go check the charts and evaluate". And as a sign of weakness, if DXY breaks lower but breaks back into the rising channel that would be a major sign of weakness for crypto and stocks.
And last chart is the BTC chart. Shows the major spots where I am looking for hesitation. Again, my current plan with bear/bull traps is to ride them until a pattern shows up on 1-4hr timeframes before exiting, unless the data tells me otherwise at some point. So this chart shows the 3 next levels to hit, and we will look higher when/if that time comes.
Now, the only thing I haven't addressed. The orange vertical line on many of these charts. Because we are in a bear market, the pivots are often CLOSE to news updates as thats when the markets start to price things in. The orange vertical line on each chart is the next FOMC meeting which will likely announce the next inflation rate hike for the USA. Note that I do not trade news, this is here solely so that I can use that timeframe or even a couple days before ot try and find a bearish pattern arising so that I force myself to sell and wait on the sidelines. I will sit on the sidelines until the news happens, and then still wait for the market to present me my next good trade opportunity.
This is A LOT of information to digest. Please let me know if there are questions or information that people want elaborated because I am likely assuming something is clear when in fact it actually is not. There's so much happening here but just by being aware of these ideas and I can sit back and let trades play out.
Bitcoin dominance is in a rising wedge, statistically this should break lower. Most bullish moves in this market start with bitcoin getting the action, followed by altcoins running for some time. BTCd is typically a good indicator of that happening and it overlaps well with the current market structure. To make this extra fun, I added a time fib shown on the chart which can often get very close approximations of when a pivot in price action will occur. If that ends up playing true, I'd expect that time fib to mark the next high that BTC.D prints before breaking lower. Again, I don't like to predict but this is for fun while we watch the rising wedge do its thing.
TOTAL2 is the next chart. I've been watching this falling wedge and its finally broken out with our BTC bear trap trade. So the things to observe on this one are the major support/resistance levels marked. Because we are just trying to stay in our longs until told otherwise, I pay special attention to the strongest levels. These essentially serve as a way for me to tell myself "Hey, there is a lot of resistance here, go check BTC and other major market coins to see if they are printing a bearish pattern". These levels also serve for me to know when to identify market weakness. If support is broken but then fails a retest and actually breaks under the support level, I will use that as a sign of weakness (sort of a bull trap) and exit with profits. And one piece on here for fun in the measured move of the wedge, which happens to overlap very nicely with strong resistance. I'll address the orange vertical line at the end of this.
TOTAL3 uses the same exact ideas as TOTAL2 above. I'm only showing it because this is an instance where this one still needs to breakout. So use the same ideas discussed in the previous idea for this chart as well as this is what I use for tracking the smaller altcoins that I trade.
DXY shows the same ideas but inverted. When DXY performs poorly, stocks and crypto do well. But DXY hasnt broken anything yet. So I'm using this rising channel as a method to tell myself "hey, the lower trendline got hit, go check the charts and evaluate". And as a sign of weakness, if DXY breaks lower but breaks back into the rising channel that would be a major sign of weakness for crypto and stocks.
And last chart is the BTC chart. Shows the major spots where I am looking for hesitation. Again, my current plan with bear/bull traps is to ride them until a pattern shows up on 1-4hr timeframes before exiting, unless the data tells me otherwise at some point. So this chart shows the 3 next levels to hit, and we will look higher when/if that time comes.
Now, the only thing I haven't addressed. The orange vertical line on many of these charts. Because we are in a bear market, the pivots are often CLOSE to news updates as thats when the markets start to price things in. The orange vertical line on each chart is the next FOMC meeting which will likely announce the next inflation rate hike for the USA. Note that I do not trade news, this is here solely so that I can use that timeframe or even a couple days before ot try and find a bearish pattern arising so that I force myself to sell and wait on the sidelines. I will sit on the sidelines until the news happens, and then still wait for the market to present me my next good trade opportunity.
This is A LOT of information to digest. Please let me know if there are questions or information that people want elaborated because I am likely assuming something is clear when in fact it actually is not. There's so much happening here but just by being aware of these ideas and I can sit back and let trades play out.
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