All Trading Positions Are Now Closed
After opening new positions in ETH at approximately $500 after the recent mini dump, I subsequently decided to close all of these positions in profit after I saw the $600 mark fail once again. The same scenario is playing out in BTC, as it has been rejected at $19.5K a number of times now. Considering we are in a bull market, it makes sense to be more biased towards the upside.
However, as I look at the 4 hourly and daily charts, a massive double top pattern is starting to form. This is probably one of the most successful bearish patterns and I don't feel confident remaining in or opening new long positions at this stage.
Though we are likely to see fresh highs very soon, it is also a time of high volatility and I am expecting a significant dump before we see more significant upside. Sitting out of a trade will not cost you money! Sure, there is always the case that the bulls enter and drive prices higher but I must be honest, it does appear that a significant correction is long overdue.
I would be satisfied with at least a 20% drop to ensure it safe to enter new long positions. PlanB has also noted that extreme volatility will now enter the market. So prepare for violent swings.
The thing about a bull market is that the bullish bias often conquers bearish technicals but obviously not always. There is the chance that the market defies this pattern and moves higher but I would rather remain on the side of caution. Either way, volatility has to strike at some point and after reaching such tremendous highs, volatility would require a downturn.
I am currently looking for an entry at approximately 16K and perhaps even lower. However this plays out, my next trade will be after a significant dump. I don't feel comfortable going long at these levels, especially as there has always been approximately a 35% dump upon reaching the previous all time high.
I understand the dynamics are very different this time around but until it is proven by price action, I am remaining with the data we have. Please do not consider this investment advice! Theses are merely my opinions.