BTCUSD update: Some selling activity is now appearing in the middle of the 16350 to 17876 resistance zone. This price action also happens to be in an area of overlapping resistance levels that I will explain further in this report. If price cannot recover quickly, it is more likely to retest the low 15K area.
I have been writing about the 16350 to 17876 resistance zone for about two weeks. It is the .618 resistance area relative to the broader bearish structure off of the 19891 peak. Upon further evaluation, there are two additional levels within this zone that are also worth noting since they point to a increased chance of selling pressure.
The 16923 level is the 1.618 target projected from the 12795 low. Often price will hesitate around these projections as it is doing now. The other level which is less relevant but still worth noting is the upper boundary of the reversal zone measured from the 16474 peak. This price is worth noting because it serves as a breakout point. If price pushes above, it is then much more likely to test 20K, if price can't break this level, then it is more likely to correct which can lead price back into the low 15Ks.
Even though price is showing potential reversal activity at the moment, it still has to prove its weakness by breaking back below the 16450 and 16100 areas respectively. This is where letting the market prove itself comes into play. If you are in for a swing trade long, and prefer to be conservative, you can reduce risk now by exiting a portion of your position. If you prefer to be more aggressive, you can just hold until the market proves it wants to retrace further. Obviously you will lock in less profit but that is the trade off that you must accept by giving the market a chance to reward you further.
A healthy correction from here would be the retest of 15070 (.382 of recent bullish structure) or the 14398 to 13766 area (.618 area relevant to recent bullish structure). That is the area to look to add to a position, or enter a new swing trade long upon a bullish reversal.
In summary, the trading mindset is about anticipating. Anticipating means we consider a number of scenarios and then we evaluate new information to see which scenario the market is conforming to. At the moment this market is hesitating in an area where a significant correction can unfold from, BUT until it proves it wants to follow such a scenario, it is reasonable to expect continued strength. Having levels that are generated from market structure helps us to paint a better picture of what is within reason based on market movement, not our feelings or opinions. My plan is to initiate a swing trade long IF my projected supports can be reached and validated around the low 15Ks or low 14Ks as described above. Having such criteria helps me avoid being consumed by the reactionary emotions of greed and fear which is what drives the herd mentality.
@MarcPMarkets Hey man i really appreciate the time you are putting to educate us and specially saving my ass several times.
You ROCK. Keep Rocking. I wish you have a prosperous year.
DeepseaDom
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Thx Marc!
zehuci
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Thank you for the analysis!
rajnet
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As usual a fantastic analysis!
MisterBurkes
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Hi MarcP,
I agree with your analysis in that I believe BTC needs a larger correction before it can break through to potentially retest ATH. However, looking at fractals and previous resistance/support lines, I was thinking maybe it'd drop to 15,400-15,600 before rebounding. Does that zone line up with your Fib at .500?
Thanks,
MB
GreaterNinja
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GreaterNinja
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@GreaterNinja, bearish twist on 6hr. bearish pivot appearing on 4h. We are in a timeframe where price can drop hard for the next 24-36 hours IMO.
@GreaterNinja, Honestly, this looks like a scenario where I'm going to stagger multiple rebuys to cost average, since I think BTC really could correct to anywhere between 13.5K-15.6K imo.
GreaterNinja
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@MisterBurkes, i'm thinking low 15 per Marc and cloud, 13.2k or lower, such as 12.8, 12.2, 11.7, etc. Regardless more downside potential next 24-36 hrs vs upside IMO.
You ROCK. Keep Rocking. I wish you have a prosperous year.