Bitcoin: 45K Resistance Favors Bears.

27 Mac 2022

42K to 45K resistance means probability favors selling activity, even though there is NO visual sign of it. For me this CLEARLY means NO NEW LONGS, or exit existing longs like swing trades or day trades. Based on the price structure, this is a location to look for swing trade setups on the short side which is not a choice for me since I do not short Bitcoin.

Points to consider:

1. This is a probability game and RISK is the only factor we control. People who constantly ask me "Where do you think Bitcoin is going?" tells me that they are profit focused which is rooted in fear. There is no way to know where price will go and anyone that claims otherwise is attempting to fool you, unknowingly fooling themselves, or hoping that the random nature of the market makes them look like a genius.

2. Price structure and price action can help us gain a sense RISK by highlighting particular locations where we can anticipate setups or particular price action. That is ALL that matters especially for short term market timing like swing trades or day trades. Asking "Why?" is pointless.

3. The "herd" REACTS to what they SEE within an ABSTRACT environment. This means you are trying to make judgements on information that is NOT a reflection of REALITY. The reality I speak of is the actual supply and demand of orders which only exchanges or market makers can actually see (and no its not the irrelevant order book available to you on platforms like Binance, etc.). In order to be objective you must think in probabilities in the face of incomplete information.

Bitcoin structure has NOT changed since early February. Price is at the range resistance of a lower high consolidation. This price structure and price action favors selling activity. Whether that plays out or not can only be confirmed by a particular price action setup. Otherwise all we have is a location where a particular behavior can be anticipated. From this we know: RISK for longs is HIGH, risk for shorts is lower. How that risk is defined precisely depends on the strategy you employ.

IF Bitcoin sells off from the current resistance, a test of the 38K to 35K support is within reason. This type of move can take days or weeks to play out. If the lesser probability plays out (bullish break of 45K) then the 50K area is the next resistance. This is all about IF. There is NO thinking here. Either Bitcoin confirms one way or the other, then we adjust.

The biggest inaccuracy I see EVERYWHERE is that timing markets for a consistent profit is a skill. Constant reinforcement of this idea that "just learn everything, work hard, and it will pay off BIG when you become successful". Right from the start, a beginner is focused on trying to figure out how to generate a consistent profit in a game where it is out of our control. Good for the industry, not good for you.

While our own human nature is one of the root causes of failure in this game, it is actually one of the very few opportunities a retail trader can capitalize on. What makes it hard to utilize is not the intellectual aspect, anyone can learn about sentiment in the markets, it is the emotional intelligence required to recognize and WAIT for this infrequent opportunities.

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