The Wolf Den #67 - Trade Ideas, but PROCEED WITH CAUTION
Bitcoin
Bitcoin is presently dropping, and nothing has changed from yesterday's analysis. That said, I am watching very closely to see if a bullish divergence with RSI is formed on the 4 hour chart. If this happens, I will go long. It would require price to make a lower low with RSI making a higher low. This is technically not confirmed until it happens and then ANOTHER candle closes with a clear elbow on RSI back to the upside. I sometimes play them in advance with a tight stop, but this is a risky strategy.
If this div does not happen, the bias is clearly still towards more downside. You can see it forming below.
Zooming into the hourly, there's a key level circled in green. This is the bottom of the local trading range and an area that a lot of traders have been watching. If price heads down there, you would expect for there to be some bids and liquidity for longs. I will also be watching for a drop below the range with a wick and a close above to see if we can get a bullish SFP. If price passes through there easily, I would expect far more downside. You know that I am still bidding $7,777, right?
If candles start closing below the range, most people will be looking to short a retest of the range bottom as resistance. Not me, necessarily, but that's a classic setup.
Altcoin Trades
ARN/BTC
I hope that some of you caught this yesterday, because I did not. When I posted it, price was still in the blue range, but my idea was to trade a retest and not the breakout. That is still a possibility, although after a pump that big I am not going to touch this. It already hit any target I would have had. This is MORE OF AN UPDATE THAN A SETUP.
CHZ/BTC
I drew this idea for members a few issues ago, and it seems to be following so far. I am buying this once again here, at 133. The target of the ascending triangle is shown, based on the depth of the triangle measured above. Straightforward. Remember, most patterns do not reach their targets, so I will likely be selling some ahead of that, if it even gets there.
EOS/BTC
EOS looks almost exactly like LTC (shown below), but it has NOT broken out yet. I would want to see a clean break and hopefully a retest, just like LTC has done below. This could be an opportunity to get in a bit earlier than LTC on another major. This also has the same 2 bullish divergences at Litecoin. I am using Fibs and drawn levels as targets.
LTC/BTC
Litecoin has been disappointing, to say the least. It's hard to trust majors in general, as they move slower at this point and have more people holding from years past. That said, this chart looks amazing. We have had multiple bullish divergences with RSI on the daily, one just a few days ago. Daily divs often play out very slowly, so this is normal. As you can see, price is breaking the key resistance on the chart, signaling a potential break of the downtrend. Yesterday technically broke the line, and today we are seeing a move away on increased volume. That is EXACTLY what you want to see on a breakout. Even if this fails or you do not choose to take the trade, it's a good example of a resistance break and retest on volume. Fibonacci levels and key areas are drawn. These can always be used as targets, support and resistance on any chart.
Always watch for hidden bearish divergence after a bull div to see if the bull div has already played out. We want to make sure to be careful if we see a hidden bear div confirm.
For me, this is a smaller than usual position because I expect it to take a very long time to play out.
PNT/BTC
PNT is the new coin that was swapped for Eidoo - EDO. It seems that the market responded well to the news! This is only an hourly chart, we have almost no price history. That said, it's clearly consolidating in a pennant, making higher lows on each drop. That's generally a good sign. As I often remind people, pennants often lose the support and become flags - still bullish. So keep that in mind.
This is the hopium chart and shows the theoretical target based on the length of the flagpole. That pole, however, comes from when the listing was added, so it's hard to trust. If it breaks above, we will soon be in price discovery and it's hard to ascertain a target. The safest entry is a break and retest of the top line as support. That's what I will be watching for.
WRX/BTC
As you know, I have been buying this for weeks in the demand zone drawn. I decided to continue to hold, as it never quite reached my stops and I could see bullish divergence likely forming. It is finally attempting a breakout from this major downtrend and consolidation that it has been in since all time highs were reached. I drew the overly optimistic path, but the key levels and targets for me are shown. We really want to make sure today's candle closes above that blue line, which it is still struggling with. If that happens, this seems likely to go up. We have seen other setups like this fail, but all you can do is manage your risk and play the chart. This one "should" do well.
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Voyager
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Phemex
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RoundlyX
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TexasWest Capital
This is where I spend my days teaching and learning! Our Discord group is a one stop shop for everything you need to learn to trade and control your emotions. Feel free to DM me on Twitter or respond to this email for questions.
Choice IRA by Kingdom Trust
Self-Directed IRA for Americans - allows you to invest in Bitcoin and any other asset for your retirement, with all of the tax benefits of a normal IRA.
Efani
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BlockFi
BlockFI is where I personally store part of my long holdings. They offer up to 8.6% annually, compounding, depending on the asset (BTC, ETH or GUSD), which is much better than any legacy savings account or investment.
Follow me on Twitter at @scottmelker. This is where I am constantly updating my trades and sharing ideas.
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.