Caution is Neccessary, Bitcoin Traders

Readers of the weekend update article will no doubt now understand why I said that I was going to pocket my gains in bitcoin at the $715 point.  To recap, this is what the daily chart looks like:

I pointed out that as of Saturday night, pricetime was bumping up against 4^th arc resistance.  While 4^th arcs do not typically stop strong advances such as this one cold (but NEVER say never), they quite often slow advances down with a pullback.

So it was that I suggested that it was a good time to pocket the $80/coin we had made since we called the start of the advance at the end of the 3^rd square.  I was worried that price might blow right through resistance while I slept, but as I’ve said before, I don’t mind missing an occasional rally if the smart move appears to be one of caution.  Caution paid off this time.

So what’s next?  Of course, I don’t know for sure, though it seems likely that the rally will resume and price will get through the 4^th arc pair overhead.  When/if it does, I will be a buyer again.  But you know, we haven’t looked at a bear setup in a while.  While my sense is that this bull rally is not over yet, let’s see what the chart says:

This chart is actually a bit disconcerting to the bull case.  The arrows point to areas where we can see that pricetime respects the setup.  Note that the rally was stopped by the 5×1 Gann angle, and as I type these words price is stuck under the 4×1 angle.  More importantly, unless price resumes strongly upwards, pricetime will soon exit the 2^nd arc pair of this bear setup.  If it does that without having broken through the Gann angle resistance we see here, I will reconsider my bullishness, and sit on the sidelines until I see convincing evidence that the bull market is going to resume.  It remains quite possible that the 4^th arc of the bull setup above really IS going to be the one that stops the advance.

We should have an answer soon.

Happy trading!

Remember:  The author is a trader who is subject to all manner of error in judgement.  Do your own research, and be prepared to take full responsibility for your own trades.