The Wolf Den #52 - Trade Ideas
Bitcoin
After sending the newsletter yesterday, Bitcoin continued it's movement up. I actually tried a short, but missed my entry by $3. I was a bit too greedy, but it was only meant to be a scalp. Quickly want to show you why, just as a lesson as to what I look for. It was a really simple setup, based on an RSI Div and TD Sequential printing a few 9s.
That said, I am currently long Bitcoin from $9,220 - which should not surprised you, as that's the red line I have posted in the past few newsletters. My orders were set there over night. Woke up happy. See below.
The 4-Hour chart (and 6) had a clear (small) bearish divergence with RSI just barely touching overbought. This is a clear short signal for me, and works most of the time.
In addition, TD Sequential printed a sell 9 on the 4 and 6 hour charts. That was enough confluence for me to be pretty sure that price was going to drop a bit. It's that simple.
Quick note - I have been harping on these 3 lines for a few newsletters now. Looks where the recent dump ended - on the red line to the cent. Cool stuff. I caught a long there while I was sleeping and am currently still in it for the moment.
This bull flag is no longer technically valid. That said, trading is about watching a chart to see what is happening with traders and their sentiment. Even though that wick technically invalidates the flag, I still personally like the idea. That wick (red box) looks like a huge bear trap to me. A major liquidity grab below that blue line at $9,415. Lots of liquidity engineered down there, before coming back up and closing candles in the flag and above that blue line. Just really interesting to watch. This is how your stops get swept. This is how your shorts just below support fire before price reverses. I know I keep harping on these ideas, but it takes a long time to identify them on charts.
Trade Ideas
BAND/BTC
Quick update. This looks to have bounced off the pink support and be heading back up. A break of that new white line would signal that bullish consolidation is likely finished and price is ready to rise once again. I see nothing bearish on this chart.
BCH/BTC
Oversold with a potential bullish divergence with RSI. You can see the past 2 and how price reacted. Confirms at candle close if RSI still has a definitive elbow up. Safer entry is to recapture the blue zone as support. Safer even is a break of the descending line, but this div could make for a really nice trade from here to there regardless.
CELR/BTC
Just posting this again, in case you missed it. This is my favorite set up right now, although it can take a little bit because it is a low sat coin and the sell walls are big. Either way, this has clearly broken the descending blue line and retested it as support. Volume yesterday was significant and today's is much bigger than previous days (excluding yesterday) as well. Interest is growing. It's still sitting at a great entry.
ETH/BTC
POTENTIAL bull div with RSI. We need to see it confirm at the end of the day with a clear elbow on RSI and price. Still just an idea, not a trade. I have described this at length in the LTC and TRX setups, since I wrote those first. A break of the descending line would be a safer entry still.
This looks like it could reverse strongly with that div - but note that LTC has the same div and RSI is oversold - I expect a bigger bounce there if these go back up. BCH is oversold with the same div as well.
LTC/BTC
This is one of the rare moments where a chart looks so god awful that it actually drew my attention. To be clear, this has broken every meaningful support, it's in a downtrend and looks terrible. We all know that Litecoin is fundamentally strong, people are generally interested. So it will reverse eventually.
As you can see, we have a potential bullish divergence with RSI on the daily chart, at the most oversold RSI we have had all year. We need to WAIT FOR CONFIRMATION, meaning that RSI has to have a clear elbow up when the candle closes. This should at least target resistance at 5110, if not a full reversal. It does really need to start recapturing those lines as support. A break of the descending black line would be very bullish. But there's money to be potentially made before that, even if it then continues down. I like this one the best, because RSI is oversold.
Here are the last 2 oversold bull divs on Litecoin:
TFUEL/BTC
TFUEL/BTC
This is not a trade, just an update from yesterday since this was a request. Look at that daily candle - it shot right up and was rejected at the descending line. Now it's back under the 25 resistance. If you see candle closing above 25, this could turn bullish, but really a break of that descending line is the key to this setup. An illustration that entering at resistance instead of waiting for it to break would have trader underwater here.
TROY/BTC
Making a small move today, but I am not interested until it breaks the descending black line. A break of the pink line would confirm a potential double bottom, targeting 47 sats. Nothing to trade here yet, but someone asked so I took a very quick look. I would like it above 36 the most.
TRX/BTC
Like Litecoin, this has a potential bullish divergence with RSI on the daily, although this one is not oversold. I would like to see a daily close above 159 or 160 with a clear elbow up on RSI, which is there at the moment. Remember, for me a divergence confirms when the period closes and this elbow up on RSI and price is definitive.
You can see that this is generally ranging. It really gets better above the EQ around 190 sats (that's the dashed centerline of the channel, the equilibrium). A break of the descending blue line would signal a likely end to the immediate down trend. So depending on your risk tolerance, you can enter at any of the points mentioned. Personally, I am looking to trade it around 160 with a clear bull div, if it happens.
WRX/BTC
WRX is still testing this key support area. So you could take a trade anywhere around here with a stop below this zone. That said, the zone has been tested a few times and should become a bit weaker with each tap. As you know, a double bottom is complete conjecture without confirmation. I went into that in great detail on Tuesday. The main trade here is the bounce from this support zone.
That said, I will be watching to see IF this can potentially form a double bottom, with the trade idea shown. To be clear, I am already in this. But a break of that pink line, which is the swing high between the two bottoms would make a double bottom with the idea for the trade shown. The area of the 38.2% fib makes a lot of sense as a target, because that's the area where this breakdown began as well. If you look to the left, there's lots of price action here, which means likely lots of interest and orders.
XTZ/BTC
Back to the beginning. Price has just tapped the exact line that we were trading this at many weeks ago. This line was the previous all time high. I have circled the tap and potential entry here for you. Personally, I am buying in this area, and would set a stop loss below the lower white line. If you are taking this trade, size your position accordingly to allow for that wider stop loss.
ZIL/BTC
This has already gone flying, but I am looking to enter on a retest of the top of the old trading range, around 94 sats. I was not watching this at all, so I missed the entirety of that move. If alts stay bullish (huge IF, I am sure BTC will ruin it), then I am looking for something like the path shown. It's an idea, very unlikely to play out. I am always comfortable with "missing" a trade, so if this never comes back down it's fine. There's always another opportunity. I am just showing you where I would personally be interested.
The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor.