Hey team,
Nobody likes a -15% pullback on the Bitcoin daily chart, but I'm here to show you why it's really not as big of a deal as everyone is making it out to be.
Do you remember the last time I spoke about Bitcoin on the blog?
Bitcoin was just breaking through the 50K psychological round number and the bulls were in so much control that it was almost ridiculous.
Here's a quoted daily chart from that blog, with the big question I had at the time, tagged onto the bottom:
BTC/USD Daily:
Look at how bullish this bad boy is.
Just wow.
You can see that after the previous breakout of resistance, price retested the zone as support before making the next step higher again.
What're your thoughts on a pullback to retest this latest zone and will you be buying?
As you know from my simple support and resistance trading strategy, I only trade around daily zones.
This is because price trades the most efficiently around them as market liquidity increases, while also giving us clear areas to define our risk around.
So when I asked the question bolded in the quotes above, I was fishing for someone to say that they hoped so.
Because it's the only chance I would have gotten to trade Bitcoin from the long side since breaking out.
Now take a look at the updated Bitcoin daily chart below:
BTC/USD Daily Updated:
Nope, not yet...
So we have all this doom and gloom, yet price hasn't even retested (let alone broken through) a single daily support/resistance zone.
Jeez guys, let's all chill out here.
Okay?
It really doesn't matter how price moves between daily support/resistance zones.
The price action in between is nothing but noise.
And with price still within this no man's land, there's still a bit of room to fall before retesting previous daily resistance as support.
Thus finally giving us an opportunity to more safely buy the dip.
If it does reach that zone, then we look for it to hold before zooming into an intraday chart to look for a long entry as per the strategy.
So let's wait for price to actually retest the closes daily support/resistance zone before worrying about bearish price action, okay?
Best of probabilities to you,
Dane.
FOREX BROKR | LeoFinance Blog
Daily market analysis.