BTC TA: Support at $3890, Resistance at $4140
BTC has been dropping over the last 8 hours and actually temporarily broke down through a support level at $3890 an hour ago. I had an alert on my computer set for this because I thought if it truly broke down through this support it could fall all the way to $3350.
However, I decided not to sell because of the volume:
That blue shaded area at the bottom of the graph is the volume over time. Because there was still so much volume I thought the breakdown was fake and BTC still has some bull run left. It quickly broke back through 3890 and as I'm typing is trading in the $3950-$4000 range.
The next level of resistance is the lime green line on my first graph: the Tenkan-sen or conversion line which is located at roughly $4140. This is the average of the high and low over the last 10 periods on the 4 hour graph. If BTC breaks through this level it could continue its seemingly endless rise, but if it bounces off then it will trade in the 3890-4140 range for the time being.
A Mistake I Made
I actually sold some BTC at around $4140 USD thinking a pullback was inevitable and I'd just buy it back cheaper. However, I was basically just guessing what the top was while BTC was still rising in a phase 2 bull run. It continued rising to the $4300s. Of course now the price is less than it was and if I wanted I could buy it back cheaper, but that's not the point: I had no idea what the top was and it very easily could have risen to $5000 or higher before turning around.
Don't play guessing games and try to predict where the top or bottom is. People could have tried that many times from 3000 to 4300 and were very likely to be wrong most of them. Just calmly read the chart and wait for signs of a top to appear.
Disclaimer: This is just my opinion and is for informational purposes only. Not meant as financial advice, do your own research!
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My plan:
This is going to seem somewhat counter intuitive, but if it reliably breaks through 4140 I'll buy BTC back and if it reliably breaks down through 3890 I'll sell for USD. I have no desire to play trading pong in the 6% range of 3890-4140, but I think there are huge drops or gains possible if it leaves this range.
The key word is reliably. Going to watch the volume closely on each and probably set stop losses to buy out if it goes against me quickly.
Update 2:
I expect it to stay in range and continue bouncing
It didn't break out immediately which means an inverted head and shoulders has formed:
I don't generally look at formations or use the 15 minute chart, but this is a really bullish indicator in general. There is a firm resistance at 4200 that was a former support during the ATH period.
I'm going to be out, but I'm putting in a stop order bid for 4200.1 and think if it passes the resistance it could moon.
Honestly, I'm hoping we get a hard pullback to the 3300-3400 area where it last briefly (couple days) did some consolidation on the daily chart. Def. buying there.
I could see a pullback even further to either 3k or 2650, but I think whenever this bull run ends it will most likely end up around that number and will be a good buy.
That kind of pullback would work for me. I'm just looking to build my core position a little more. Sold off majority of my BTC to buy other coins throughout the year. BTC needed more love, though NEO has been good.
We can't always have it our way , we had gains and we have loses , it's a part of the crypto hustle . Hustle on
Some other traders have the resistance level as high as $4200, but it bounced right around $4145. I obviously have some gamble in me, but not enough to try to trade in such a narrow range.