Yep, ANOTHER analysis on Bitcoin...
Well, I mean that's what everyone wants to know, right? Also, all paid subscribers now have access to the full CryptoGirl group features! Read on for details!
I woke up on Monday morning at 5am, I was excited to be driving to be setting up my new office and I had to leave at 9am, so I wanted to squeeze in some charts with a couple of coffees.
Things were looking great, a lot of alts were down and consolidating, ready for the next leg up. I had talked for weeks about scraping bits of profit on alts when BTC reached 55-60k. I had taken some, but I had plans to take a bit more on the next leg. Things were going to plan!
But….Bitcoin doesn’t play by anyone’s plan. Unfortunately I was shut down early by the only thing that matters when its on a khamakazi mission to a 20% plus drop. If you have read my newsletters, you will know the 55-60k area was somewhere I knew we should take advantage and err on the side of caution, but the speed at which the re-trace unfolded on Monday and today was quite unexpected.
I shouldn’t be surprised of course, BTC never fails to do that. I don’t really have stop losses on my long term holds, they are, after all, long term holds, and short term price action shouldn’t really be given too much attention but as discussed in my last newsletter I simply felt it wise to lock in some gains, not just to potentially free up some USDT for dips but also to re-balance my portfolio and take some gains. I probably do this a few times a year. I felt it was time.
A few sells had been shared in my Chart Channel and while I did not maximise this, in crypto it is very hard to sell the top and buy the exact bottom. The best you can do it remove this expectation from your mind and do the best you can. A good tip on doing this is to set sells and buys in small, staggered stages - on most alts I managed 1-2 sells out of 3. Expecting I would get 3 on all my targets would have always been a disappointment. It also works the other way, set staggered buys on dips - the reason you have two or three is because you might get one or two, which is certainly better than one. Managing expectations also helps with your trading mentality. While there has been drama, doom in the past days, I can honestly say having seen this many times before, it was and is perfectly OK.
If we look back on my last newsletter, dips to 42 & 50k have always been part of my potential paths, all bullish by the way, and a healthy reset is a good thing long term. prices do not just ascend and keep going and the quicker you get used to this the less emotional and panicked you will be when it does. Being emotional and in a state of panic is not a good time to trade. You need to be calm, OK with the situation and remain in control.
I did not sell on the way down, the past me as a newbie retail investor would have sold the bottom in a complete panic. My take profit targets have not changed.
I do have a buy target, and that was around the 42k area. Today, I slowly in small amounts started to buy. Not a lot because again, there is always a risk we go down further and I am sticking to my plan.
My regular newsletter readers and group members would also know that I stopped “trading” about a week or two ago - that is setting quick buys and sells. I wanted to focus on my long term portfolio. Usually if trading, my members will also know that I immediately shut longs on the first sign of Bitcoin volatility. As we have seen on a Bitcoin retrace, alts do not fair well. Luckily, I was not in any trades.
I also, do not trade leverage. I am not saying that it cannot be benficial, but the past two days have seen the largest liquidations on record for crypto. Liquidation is when an exchange takes all of your collateral to make up for your losses, leaving you literally, with nothing. It automatically sells your assets when they become too low to pay back the money you owe. Think of it like when someone takes your house because you couldn’t pay your mortgage - it is out of your hands. Personally, and it is just because of my personal style and risk tolerance, I do not want to even consider that as a possibility. I also rely on trading as a source of income and I have a family, so for me its a no go.
Dont get me wrong, many people use leverage successfully, but just be aware of days like these when Ethereum on some exchanges saw $700 - if you are losing leverage do not do so on the premise that certain situations cannot happen. In crypto, they can and will.
Let’s dig into that chart.
Lets look over what we looked at in our group on Monday as a possible scenario (see below on how to join - this is now open to all subscribers).
What we have seen, is the blue channel being visited, and the red path being followed, although as I said, it happend much faster than I had anticipated, but if it was on the cards, we should have made ourselves comfortable with that.
On Monday morning, as well as sharing my bias that we get to 60k, I said:
“Do we hold that $55k, or do we go and test that $50-$52k area first (untested). All we can do is play level by level and watch them. Either way is super bullish still and paves a path for 60K either way.”
What I meant, and still mean by that, is that a retest of a previous support area is actually better in the long term because it makes for sustainable price action. We discussed this also in my last newsletter, about building floors - support levels to then keep climbing. Its like climbing a mountain. Sometimes you have to stop to regain energy, eat, sleep. You cant do it all at once. Think of it like that. A retrace and a test of some untested areas is key for Bitcoin to continue and remain strong.
The price did in fact go lower. But zoom out - this was a screenshot I shared in the group on Tuesday, does this look bad to you? To me, honestly, even if we go to that green box everyone has been talking about to retest that (un-tested) weekly level at 42K - we are still punching in some nice bullish price action, and, lets get some perspective, we are at the same price Bitcoin wise as we were A WEEK AGO. At the time we were probably feeling euphoric!
So tonight with some further action I’ve wiped the chart and started again, with some further price action we can see new support and patterns forming and it might give us an insight into what might happen next.
Lets start with the daily. Still a few hours to go on the daily candle but this is a bearish candle. Its read, large, with a full body. Only the wick is saving it from being a complete catastrophe.
OK but lets look at the positives (I’m a glass half full / look on the bright side kinda gal). There was some buying pressure at $44.8K, and that’s a key daily level. Just underneath that is that $42K EVERYONE is expecting. The fact that everyone is expecting it does allow for the possibility that shorters get liquidated and bidders get front run. Think about it, if you were a market maker, would you let everyone get their bids or would you take it all for yourself, forcing other buyers to buy higher? And bitcoin, doesn’t usually do what we “think”.
Again, looking at this and zooming out, bitcoin is still extremely bullish, and a 30-40% reatrace, as I keep saying was not unseen in 2017 (previous bull run). It may help some of you to study the price action back then so you can know what to expect. Of course we wont do exactly the same thing but just re-align your expectations on what a bull run is. It is not a vertical ride from one price to another. It goes up and down in a zig zag, so that includes the lows.
At the time of writing, we have seen top to bottom a 23% decrease. Not the worst I’ve seen. Substantial, and fast, but not unusual.
Lets dive into the 4 hour and one hour in a bit more details and see what we can gather from that. $ hour is top, 1 hour is bottom. We will use the one hour so we can get a better picture of what we might see coming overnight and into the next day or so.
The one hour is more interesting because we can see it is consolidating and starting to range between $44.5K (where it is finding a bottom) and $49.5K (where it is hitting its head). At first it looked to be creating a bear flag or penant, but I am not sure if the pattern is consistent enough and the “pole” for me is not long enough in comparison to the flag range. Having said that with some more price action we may well see a pattern form. For me, right now this is ranging and consolidating and it sounds obvious but it will either result in a reversal or a continuation. We should watch both levels for a break either way.
For more information on bear flags, or penants, visit : https://www.investopedia.com/terms/f/flag.asp
https://www.investopedia.com/terms/p/pennant.asp
*bear in mind penants and flags can be bearish as well as bullish as they are usually, continuation patterns. Both are continuation patterns and you should learn to watch out for them as they are often very reliable. I am currently preparing a cheat sheet on these for everyone.
So what might we see in the coming hours and days?
So I am not ruling out the possibility of another leg down to 42K, the daily candle is very bearish and although there is a start to a bottom being found, the reaction has not been strong so it is a possibility. I would be quite surprised if we go lower than this key weekly level.
Ideally, I would like to see Bitcoin settle down and range. Alts have taken a beating and it would really do us all a favour for it to reduce in volatility and allow alts to fly once more. If Bitcoin continues to be wild, it wont do alts any favours.
Bear in mind, no-one actually KNOWS what will happen. Even the best traders I know do not have the absolute answers - everyone is speculating so do not blindly follow anyone. Watch and react - that is all you can do. Think about - what will I do if it breaks this level or this level? What is my plan? Decide and stick to it if you can.
All we can do now is watch key levels (so now we are watching $44.5k to $49.5K) - I want to see 50K reclaimed to even think about higher levels coming. My advice? set some alarms and get on with your day. Watching it minute by minute wont help it do what you want it to and you may even become emotional or make a rash decision. My plan right now includes a visit to 42K.
I hope this helps you think about not just how to look at charts but more importantly your expectations and mindset. If you have any questions or need my helps and support as always please do reach out to the group or myself. Just talking to other people can really help. We are all in this boat together (albeit right now with a little hole and some buckets!)
Cryptogirl subscription update!
I’ve been thinking about ways I can make things better. One of the stings for me is the newsletters take up so much time that I struggle to keep up with the group, daily charting, and my own trades and analysis. Also sometimes I’ll write it, then the market changes significantly and I have to start again. This is frustrating and I’m worried doesn’t bring the best value for you. I want to do more tutorials, interviews with other traders, podcasts, videos….!
I also feel like two a week is annoying as an email, no? The group now has 50 members and is becoming a great place for people to chat, see my charts and trades and learn from me and one another.
I want to keep the newsletters but I want to shift the focus onto the group and keep the charts and analysis regular and more up to date in the charts channel, plus have time to create more tutorial content.
In future I’d also like to invest in hiring some help to push this forward even more but that’s way off - I’m just getting started here.
There is a change in fees, but do not worry those who have joined already will not be affected by this change, and you will keep your original rate, forever. If you were granted a free subscription from me (admins or friends) you will not need to pay.
So from today:
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I have kept the fee relatively low - writing a newsletter, creating tutorials and managing a group chat, DMs etc will be a big investment of my time! However, in my previous work I had to manage large teams, be responsible for training and development, give presentations, tutorials, & develop a positive community & culture. I love building communities and a positive mindset. The aim for me is to do this for both experienced traders and also people who want to enter the crypto space - to offer support, content and share ideas to help us to all learn and grow around a subject we are all passionate about! Therefore it is important to me the fee is reasonable, and affordable while being great value.
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Take care, Lois xx (AKA CryptoGirl)