Bitcoin: Bearish Break Likely.

17 Jul 2022

Bitcoin is stuck within a lower high consolidation that ranges between the 22K resistance and high 18Ks. Meanwhile, structurally and environmentally, NOTHING has changed. Basically this market is out of play until a new catalyst comes along. Let's talk about which way price is likely to eventually break.

The short term structure is BEARISH and the 22K level has YET to be compromised. This resistance is a LOWER HIGH within the context of the bigger picture. Lower highs often lead to lower lows UNLESS a new piece of information comes into play.

At this time, the broader price structure still favors a test of lows. Along with that, bond yields are inverted which is a bearish sign.
What do treasuries have to do with Bitcoin? An economic recession is bad for the S&P and in case you haven't noticed, Bitcoin is correlated at the moment. On top of that, we have a Federal Reserve that is fighting inflation by supporting a rising rate environment, which further supports a very strong Dollar. These factors do NOT facilitate a bullish and highly speculative environment like we have experienced over the previous two years.

For Bitcoin to rally, (especially to nonsensical levels like some self appointed "authorities" are calling for), the economic environment NEEDS to be encouraging AT LEAST.

Even if Bitcoin manages to break the 22K resistance, it has many more levels to go before it proves that a change of trend is in play. For example, the 28 to 30K level (next major resistance) would have to be cleared at minimum.

I called a short the previous week off the sell signal that appeared near the 22K level. It pulled back into the 18Ks. IF you go back to that report, I shared an update the next day pointing out that it would be wise to lock something in even though there was no conflicting signal at that time.

Since then, a bullish outside bar developed and now price is trying to work its way higher. Could this be the rally everyone is waiting for? Probability is NOT in favor. The rational thing to do is cover the short for whatever you can and WAIT for the next sell signal. Your primary goal should be to mitigate risk, NOT chase profits. Greed is a liability of human nature and most retail traders/investors are not aware they are controlled by it.

If you are new to this game, instead of chasing false dreams and listening to cowards who hide behind fake names proliferate nonsense, take the time to learn how markets work. There is NO hurry, Bitcoin nor the stock market is likely to turn higher any time soon.

In order to make objective and effective decisions in any environment, you need to LISTEN to the market. You NEED to listen to PRICE. Markets are highly random and efficient which means NO ONE knows MORE than the market. That means markets cannot be forecast over long time horizons with any degree of accuracy.

At the same time, it is possible to isolate opportunities on smaller time frames that are associated with a reasonable level of risk. Charts are not perfect by any means, but there is enough information on a chart to make effective choices. Listen to PRICE NOT PEOPLE.

Thank you for considering my analysis and perspective. I hope you find it helpful.