Bitcoin Trading - May 12, 2017 - The Correction

Well, that wasn't entirely unexpected. If you've been following this blog, you'll recall earlier in the week I was looking for a correction, but Bitcoin had other plans. It was making new highs every day and proving me wrong. Perhaps I was looking for it too early, as the price pulled back over $100 this morning to the $1650s. Some interesting things are showing up in the charts. Let's take a look.

The Bitcoin price pulled back all the way down to the $1650s this morning and look where it bounced... our old friend, the Short Term Trend Channel(bottom red circle)! This is a very cool coincidence. Now check this out, if we "look left" the structure leaves clues about the future. The $1650s were a resistance level just 5 days ago! I drew in a black horizontal line to show it a little easier. It's pretty awesome to see how the market remembers these key areas even days later. It's also very cool to see our trend channel respected like that!

You'll also recall a day or so ago, when I was looking for a retest of $1760, $1740, and perhaps $1711. Look where price jumped back to after the pullback(top red circle). Yep, $1711s! As I'm writing this, the price of Bitcoin has come up a little more and is retesting the $1740 level now! Awesome!

In the next hours/days I hope the Bitcoin price will bounce around on top of or inside of our short term trend channel. That channel was already pretty steep, but still more sustainable than the price increases we saw over the last week. Slow and steady wins the race. Actually, it's not race, it's a marathon. I expect price to go back up, let's just hope it does so a little slower.

If I'm wrong and the correction isn't over, we could see the $1620s or even $1600 again. Bitcoin spent a good deal of time in this area and there's a lot of support there. On the other hand, Bitcoin has been in the $1740s several times as well, so we could spend some time there. RSI looks oversold and the MACD is about to turn, so I'm leaning towards the $1740s right now. I would keep stops tight either way you go. Trade safely.

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Disclaimer: I am not a professional. Trading is risky and you could lose money. Only invest if you're sure what you're doing.