BTCUSD update: This market moves fast. The anticipated retrace is in play as price has taken out the 6469 level signaling bullish momentum. 6950 to 7350 is the resistance zone to watch for the next bearish reversal.
As written about in my previous report, the 6950 to 7350 area is the .618 of the recent bearish swing. Often, when a Wave B unfolds, it happens in 3 legs (typical corrective wave). This means from here, price can retrace or consolidate slightly before making another decisive move higher into that resistance zone. If the formation resembles a zig zag going into the 6950 area, I would be anticipating a bearish reversal and the beginning of Wave C.
Waves C's are the emotional wave, they are often fast and ugly. IF the market decides to follow the scenario that I am anticipating here, then it may retest the high 4ks from this point.
As the Wave B is unfolding, it is possible for price to pullback to the 5870 to 5632 which is the minor .618 of the current move from the 5400 low. IF price retests this area and reverses, it can offer a chance to get in for the completion of Wave B into the 6950 area. That is around a 1k point move that can happen fast (a day or two). Keep in mind the 6950 level is only a possibility and there is no guarantee that price WILL retest the area. It may fail sooner.
So here is what all this means: A pullback to the 5870 area may offer a buying opportunity to capitalize on an attempt to push toward the 6950 zone. If price reverses above the 5870 area, it would be a higher low formation which will strengthen the argument even more. For day trading this trade is simple because you can measure risk from smaller time frames and exit for 2:1 or 3:1 without much drama IF you are paying close attention. This can even qualify as a one or two day swing trade, BUT again you must be nimble because any sign of failure and the position must be exited. I do not anticipate this market going back up to 8k in this next bullish retrace.
This market is FAST and there are A LOT of IF's. Flexibility is more important than anything else. If you cannot be flexible and recognize changes as they are unfolding, then avoid this market altogether until this corrective formation plays out.
Since I am flexible, and this market is so generous with momentum, I am open to take a swing trade long IF price retraces back to the 5870 area and forms a reversal structure within that zone. If I can justify 2:1 or 3:1 based on that structure at that time, I will take the trade, but like I just wrote, the target will either be 6950 or below if price shows signs of turning earlier. I am doing my best to describe trading scenarios, but I cannot force you to understand the concepts of flexibility and change. If the market offers the scenario I just described I will do my best to show the actions that I take by updating this report.
At the moment there is a clear relationship with BCH. If price goes lower in this market, BCH goes up and vice versa. From what I understand, BCH solves the scaling problems that BTC is facing. Now that BCH has the world's attention, there will continue to be a tug of war between these two markets which offers more opportunity for day traders in my opinion. Meanwhile the rest of the alts are going nowhere fast. Watch BCH for an inverse relationship. An example is if BTC retests 6950 and fails, in theory, that should be a buying opportunity in BCH.
In summary, there is a great deal of momentum pushing this market as well as BCH. This means this is no time for opinions, and where TA will help you the most. If you can't be flexible, then the most you can do is hope things go your way which is NOT a strategy that I recommend. I am watching for the higher low and reversal in the 5870s for a possible long, BUT if it gets there without fulfilling my criteria, I will avoid the trade altogether. And if you are confused by all this, trade forex, its slower.
Gentleman @MarcPMarkets and @goldbug1 this is my compilation of your work. If you would be so kind and can spare a minute, please comment.
Iruwen
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Bcash changes its difficulty adjustment algorithm (DAA) today, i.e. how hard it is for miners to find new blocks. It heavilty fluctuated until today, shifting mining power back and forth between BTC and BCH. I wouldn't be surprised to see another last desparate attemt from Jihan Wu and his Bcash minions to attack BTC, so he can keep controlling most of the mining power. He's mad because the core devs want to fix the asicboost exploit Bitmain is using to incease the throughput of their Antminer ASIC.
Unhinged
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Thanks Mark, great as ever. One thing to clarify though, BCH doesn't solve the scaling problems, it's more like a wet band-aid. Bigger blocks make the network more vulnerable and, since it requires more power to secure, centralizes mining much more. At least this is my understanding.
DVSNLV
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@mber89, BCH doesn't solve the scaling problem, but solves some of the issues in the interim. This is from someone who has been in the space for 6+ years; a supporter of both small and big blocks.
PMT2PMT
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Always looking forward for your updates. I love to learn the psychology behind it all. And the price points help me to recognize the momentum.
luigiborla
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it never goes below wma200 days (4800) if the primary trend doesn't change, please see my ideas
eag09
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If pullback drops below the 5870 - 5632, or below the sunday pullback low, does this indicate that wave B was short lived and thus taking us into C? thanks for your thoughts.
mohsinmohammed
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@eag09, my thoughts also. It hit 6650 today, which could already be the 3rd leg of the B wave?
hyipster
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Agreed with inverse relation between BTC & BCH I've noticed this too. Going long on BCH is like going short on BTC. They can't rise together at the moment.
RaulPuiu
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@MarcPMarkets waiting for your return to ETHUSD market :)