If you notice, what has been happening in recent price action is a spike occurs on the initial leg of the move, and it dramatically declines as price attempts to follow through, like in this case, to a new high. This type of behavior has been followed by a reversal of momentum which makes the current level very risky for new longs.
On top of that, price is attempting to push the upper boundary of what I like to call the fake out zone. This is a projected zone that is based on the range of the previous swing high of 6151 to the low of 5365. There is no guarantee that price will fail, but if it does, it is most likely to happen within this zone. Combine that with the below average situation, and you can get a better sense of what this market is likely to do in the next couple of days at least.
Even though the alternate wave count appears to be in play, it is now possible to draw convergent on the highs and lows of this price structure. This formation implies shallow pullbacks and slightly higher highs in the near term, but longer term this is . Once 5 waves are complete within this structure, a serious correction is likely. Based on a measurement and projecting from the 5632 low, this market can go as high as the 6700s (which is the from current swing low) before the major correction possibly unfolds. These type of formations commonly appear in Wave 5.
One thing that I have to mention about is that like anything else in TA, it is not 100% accurate. Nothing is. When the market negates a wave count, you have to adjust to the new market information and relabel the formations. This is why it is important to understand and use multiple elements like , candle sticks and chart formations to provide guidance as well. (This is especially helpful when markets change fast like this one).
So what is the best way to play this market? Day trading offers the best reward/risk in my opinion because it allows you to participate in very short term moves, along with low risk stops and helps you avoid any major adverse movements. It also allows you to trade with a lot more flexibility because the movements on that time frame are proportionally large in either direction. It is not easy though because you must be nimble. Day trading requires a ton of attention, and a very well defined plan. Like I wrote before, if you do not have a process that provides guidance for your decision making, then do not trade at all, especially do not day trade.
In summary, the current price action has made for a clearer wave count which is , but also offers perspective on how much longer this momentum can persist before a more serious correction. At the moment, this formation may conveniently line up with the Segwit2X coming up in a few weeks. The best strategies to employ in this environment in my opinion are ultra short term, and if you are sitting on some coins with a nice profit, remember it never hurts to lock some in. These type of formations often lead to much more dramatic market reversals, and until that is out of the way, I do not plan on taking any swing trades in this market.
Comments and questions welcome.
Should I cut my losses. Or wait it out?
Do you think the BTC correction will fuel the alts, or tank them even more.
Thx in advance
"Give me some of that newly minted B2X and let's see what happens with the listing in the biggest exchange in the world... Maybe then we'll talk fiat.." they say ...
lol... Good luck!!