Our bullish enthusiasm certainly got tempered after Bitcoin dropped $300 yesterday on no new Bitcoin news. The Bitcoin price just could not break through the 6500-6600 resistance zone. As usual, what can’t go higher must go lower.
The problem has been very light volume as many traders are on the sidelines waiting for Bitcoin news. We have the Bitcoin ETF approval coming up on September 30th and many traders don’t want to press their bets. The lack of volume also creates problems where the whales come in and can move the market and spook many longs out of their positions. I, for one, was positioned pretty long expecting the next leg to be higher. Unfortunately, the price has come down and I will just have to HODL my core position and wait.
While I am waiting, I am contemplating what the next move shall be.
So let’s say Bitcoin takes out the 6100 double bottom on the charts as shown on the BitMex chart.
Do I press a short or do I wait and average in a long? If we take out 6100, we will most likely test the 5740 lows. If 5740 fails, the target for a lot of traders is 4820.
I believe the correct course of action is to average in on a long. I will scale in bit by bit as the price drops. The reason? Because wherever it bottoms, I think we will see a very significant price bounce and recovery and it will happen rather quickly.
Why not short?
My main reason for not shorting is that I cannot be sure when the break will come. I don’t want a short triggered and then I get into a short position when I am a sleep, the market collapses, but then stages the rally I am looking for. I don’t want to position short, not at these levels. The best thing I can do is throw limit orders to buy around 5800, 5700, 5500, 5000. This way I am averaged in, especially if a flash crash happens. This could be the most likely scenario if we get panic selling on new lows. The good news is that if this happens, there is a lot of money on the sidelines waiting to buy. That’s why I am not worried if the market goes lower.
The biggest issue I have with prices back around 6250 is psychological. This bear market is wearing down a lot of people. I can tell because Google search traffic is down. Crypto investors are just not following their coins like before. The bear market has decimated many investors with many having losses greater than 90%. To recover their losses, the coins need to rise 1000% or more just to break even.
The best spot to be right now is on the sidelines in fiat or Tether. I am HODLing Bitcoin at these levels and will buy more as the price drops.
My team and I are watching the markets closely waiting for next big move. To hear more of my thoughts on the crypto markets, tune into my interview with Crypto Rich on his YouTube channel. Hope you like it.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. The author is long Bitcoin. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
Charts courtesy of Trading View
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