Bitcoin: 100K Psych Barrier To Low 90s?

2 days ago

Bitcoin 99,860: missed 100K by less than 200 points so far (on Coinbase). 100K is going to most likely serve as a psychological barrier which should be considered when evaluating RISK. My previous week's scenario failed to play out because the momentum from the election results is still driving order flow. Price has YET to REALLY exhibit a healthy retrace (while maintaining overall strength). The purpose of these weekly observations is NOT to forecast the future, but instead to identify the RISK and evaluate a higher probability scenario to anticipate. From there Bitcoin either delivers the attractive scenario or it does NOT. I don't control the market, I control RISK.

The arrow on the chart points to the bearish inside bar that has established a new leg of bearish momentum. Realize that this retrace has not violated any major supports and can reverse at any moment. It is also important to realize that IF this retrace persists, the 95K to 92K area is the NEXT support. IF that is cleared this week, that will open the possibility of retesting the 85 to 82K support. Such a retrace can take a week or two to unfold, all while the broader bullish structure would still be intact.

I don't have the wave counts on this chart, but from a quick glance, the recent surge appears to be a Wave 3 of a broader 5. This is inline with a greater chance of retrace (Wave 4), even if its minor before one more test of high which can test or break the 100K level at least briefly. Once a broad Wave 5 is complete, the chances of a sustained corrective cycle increase. Such a move can take a year or more to complete. This is a tendency, NOT a forecast and I don't bet on wave counts or structures, I bet on CONFIRMATIONS.

A key point to take away from this is: I look to gauge risk and evaluate how a situation can be capitalized on. I will always highlight ELEVATED risk at highs, especially all time highs when it comes to investing or swing trades. Make no mistake, I am not bearish, I am simply cautious. Low risk high probability opportunities are RARE and also relevant to the time horizon of choice. If you can't handle the possibility of Bitcoin retracing 10 to 15K points, you either need to adjust your position size or avoid altogether and wait until a higher quality opportunity appears.

My decision making process and strategies are based on typical repetitive behaviors that I have observed over years of playing this game. Outliers look glamorous BUT they cultivate bad habits. You may win this time because you bought at 95K, but over time, that same rational will cost you. Even if you leave some money on the table, it is cheaper to learn this lesson from me than it is to learn it from the market.

Thank you for considering my analysis and perspective.