If you have followed my blog at all for the last couple months, certainly the last couple weeks, you have likely deduced that I have been expecting one more large dip in BTC.
This isn't due to some crystal ball or even much to do with reading any technical indicators, though they were also confirming.
No, the only reason I have been expecting one more large dip is because that is exactly what happened after the last halving and there is still a CME gap yet to be filled.
When you combine those two things with the fact that BTC has been having trouble breaking through $10k as well as several chart indicators signalling possibly overbought conditions, and it seems like we have all the right stuff for a dip.
However, just because everything is set up for a dip, doesn't mean it will actually happen.
And that is where the "just-in-case" buy comes in...
When dealing with something like BTC, something that has basically only gone up throughout its entire history (if you zoom out enough), it's pretty important to buy the dips.
Especially when you really examine the price action around its halving events.
It becomes all the more apparent that there is something going on there that tends to push BTC prices much higher afterwards.
The problem with trying to buy the dips is that it's pretty tough to tell exactly how low those dips will go until the dip is over.
And for that reason I like to do some "just-in-case" buys.
I just did one yesterday in fact...
(Source: https://bittrex.com/Market/Index?MarketName=USD-BTC)
Exhibit A as seen above...
I am fully anticipating that BTC COULD go down and fill that CME gap and drop a similar percentage amount to the previous post halving dip, which would take prices down to right around the $7.6k area.
Not to mention there is a good amount of horizontal support in that area as well as a possibility of creating the final shoulder of an inverse head and shoulder pattern...
However, what if it doesn't?
What if I am wrong?
What if BTC stays overbought and shoots all the way up to $20k in a matter of weeks?
Is it worth waiting on a 20-25% to miss out on a 100% surge?
In my line of thinking, absolutely not.
There are several ways you can play that...
You could decide you are going to buy if BTC breaks $10,500 to the upside as a momentum play and then stick to your other plan of buying if it gets back to that $7.6k area...
Or, you could do a "just-in-case" buy.
Buy a small positions when you get a decent sized dip in your favor just in case it never makes it all the way to your target.
If it does get all the way to your target you put the rest of your cash in there.
If it doesn't get all the way there and then goes back up, at least you got something in on some weakness...
I like to call it the "just-in-case" buy.
Stay informed my friends.
-Doc
