$BTC is this the end of the friendship? (Published: 15/08 — Updated: 21/08)

Gm Fam👋

If you have been following the trend lines in my last weekly update and buying the support and taking profits at the resistances. The week would have been a financial success.

But, what is the out look for the upcoming week…

If the definition of insanity is "doing the same thing with the expectation of different results".
Is it sane to continue a successful trading repertoire and expect continued rewards?

$BTC is in a precarious position as we speak.

I have realigned my trend lines from the previous week's charts.

The green now encompasses more accurately the daily candle openings, whilst the red better accounts for the candles' lower wicks.

What is noteworthy on the daily chart is that we are trending downwards yet consistently have been registering higher highs while simultaneously making lower lows.

This is referred to as a megaphone pattern in technical analysis. 

Is it bullish or bearish?

The set up is a bullish megaphone pattern on the daily and this thesis is congruent with the inclining trend line on the weekly chart.

However, we need one more daily candle of higher highs and lower lows to get any clarity on how best to trade this set up.

The megaphone pattern is indicative of indecision in the market and one can never be sure at present what macroeconomic or geopolitical event will deliver the verdict for a given direction.

Haven't experience with trading this set up, but we got to start somewhere.

Do you have experience with this setup?

What is your take?

16/08/2022

Friendship over…

The long anticipated third daily candle is in the process of being printed and unless the bulls respond with some sort of instant stampede driving price to new highs the thesis of a bullish megaphone pattern will become a bearish flag as Mams@bbs astutely recognised it.

The 15 minute chart adds reinforcement to my assumptions:

The consistent defiance of former obedience to a previously diagonal support, has me leaning a bit more bearish than bullish especially when you factor for the current macroeconomic climate.

Unless, we regain the two trend lines as support, my day's scalping shall be shorting from the trend lines with my TP at about $23,800 an advancing SL and the invalidation zone just beyond the higher / green trend line.

Update: 15:02 (UTC -4)

$BTC is not being allowed to return to the trend lines.
I have identified the following channel that the price appears to be observing.

As with all my posts, I'll give you the macro view and then zoom in so that you can replicate on your own charts.

I opened a short at the midline expecting us to get rejected from there…
then the following happened 😖

I then set an another short order just before the channel ceiling, an order at the red trend line, a conditional order for 75% of my margin at the green trend line and my stop loss immediately after.

Luckily, for me the price returned in profit allowing me to be comfortably stopped out.

However, it did wick down to the previous candles' lows.

17/08/22

Last night before going to sleep I opened a long after observing the following series of higher lows. Set a TP at $24,151 (red trend line intersection) and went to sleep.

I don't often open a trade, go to sleep and hope for the best (usually, will have trouble sleeping).
But in the end it played out more than well. 

As you know by now, we had a brief surge last night and got rejected at ~$24,400.
Re-entered the channel, I opened a long at the midline and doubled up at the channel's floor.

Why?
—I am banking on dovish FOMC minutes 🤞

In retrospect not the best decision given that the channel's ceiling became resistance.
I guess I am an optimist at heart.

Bear case: I have an additional double up on the white [hopefully] support.
(Still a small portion of my portfolio, so liquidation level is well away.)
Bullish case: I market execute an order reentering the channel.

Will update as the day progresses.
FED meeting 3 hours away…

Update: 11:27 (UTC -4)

Hopefully we break back into the channel

Update: 12:34 (UTC -4)

T- 1 hour 30 minutes until the FOMC minutes 

The minutes of the FOMC meeting have been released and at first glance it seems to have been neutral.

The markets have initially reacted bullish, and is now retesting the break out of the return to the channel.

My stop loss has been moved to break even (adjusting for exchange fees).
My TP has been set to the red trend line.
I will trace the SL up every couple of higher highs.

17:13 (UTC -4)

I was stopped out with ~20% profits.

Attempted to long the retest, which we subsequently obliterated and I suffered some meagre losses.

Take away: Should  have waited for the Stochastic RSI to reset.

18/08/22

I felt it necessary to show you the magnified view to emphasise the importance of these historical trend lines, and why I don't often delete lines that I draw on the charts.

$BTC would appear to have bounced off the precise trend line.

I targeted the maintenance of price action above this exact line as the criteria for my bullish thesis outlined on the 11th of August in an update to my very first $BTC weekly update post.

The day has only just started but we have returned to the confines of descending channel outlined.

Despite being in an upward trending smaller time frame chart.

I am laddering into a short position and I will not place a SL this time as every time I have been stopped out the price returned to my TP without hitting my liquidation zone.

I have been shorting since last night and have been topping up gradually, with my liquidation zone far away. Collecting funding rate revenue over the night.

My expectation is that we'll collapse the trend line and return to the floor of the channel
(if not lower).

11:17 (UTC -4)

In line with expectations $BTC collapsed the momentum line.
Support became resistance. 
I put a SL once we made a lower low and put my SL a little below the last historic low ($23,380).
And was stopped out with about 30% profit.
Awaited for a new candle to print and put two new sell orders,

One at the previous high, and another at the return to trend line.
TP at the channel floor.

12:32 (UTC -4)

15:09 (UTC -4)

$BTC is currently being suppressed by the pink downward sloping diagonal.
With the channel floor being verified as a reliable support with 5 count contacts of channel openings.

Whilst writing the post $BTC managed to turn the previous resistance into support.

This is why I always start my initial trade small should the price defy my expectations ensuring that I can safely buy higher and "average up" the entry on a given short position.

My next planned entry is at the midline, procession higher, I will enter again at the channel's ceiling.

If the price proceeds higher still I'll await for it to crown before placing any additional orders.

15:50 (UTC -4)

The midline was not achieved the stochastic RSI was ~100; so I market executed an order.
The TP has been set to  just after the floor. To catch the inevitable wick past.

Hopefully, we don't bounce again off of the pink trend line.

16:03 (UTC -4)

Had the chance to bail on the trade at about 20% profits, but I didn't pull the trigger.

We are yet to penetrate the midline, stochastic still riding high…
💁🏻‍♂️ not worried…liq. zone far off

Stupidly stopped out only for this to happen…

Lessoned learned : Await the stochastic RSI to bottom, before letting yourself to get stopped out!

19/08/22 07:59 (UTC -4)

I think it is now safe to declare the bullish thesis as officially invalidated.

I reiterated yesterday that one long standing criteria for my bullish thesis was the maintenance of price action above that white trend line, that was again established as support on the 17th.

The bulls fought hard to regain it last night, but at 2:15 (UTC -4) there was capitulation brought about possibly by panic selling in the European markets.

Usually, I would state with conviction that we would target the lower counter part of the long standing white descending wedge.

However, that is merely a smidge above the close of the last daily candle low's opening (yellow highlighted price).

Bypass that area of support and there is a very real probability of us exploring the sub $15k price range.

9:34 (UTC -4)

Currently 25% profit in a short position…

Plan is to wait for the stochastic RSI to bottom and then move my SL down to hopefully beneath the previous low.

10:08 (UTC -4)

Stopped out at ~48% bought back the same amount at retest.

10:20 (UTC -4)

Stopped out again ~20%, set another buy order for the return to trend line

10:47 (UTC -4)

Sitting on my hands

11:50 (UTC -4)

I am in a long, SL at ~20% profit.

Not much has changed.

Realised that the candle was struggling to clock a newer high.
So, I repositioned my SL to the candle's low (preempting a pull back).

The candle made a new high and then immediately pulled back stopping me out (~35% profit).

Not yet pulling back, so maybe I was too eager to advance my SL and conserve profits.

Better safe than sorry…

Feeling pretty sorry now…

20/08/22 9:45 (UTC -4)

$BTC has caught on support just above the 20k price region.
Lining up perfectly with levels earlier in July.

Finally, we are witness to the reset of the stochastic RSI on the daily chart.
Safe to assume that we blast off from here?

The 15 minute chart seems to indicate that we are following a rising trend.
However, market sentiment (inferred by a recent record high negative Funding Rate of -0.0102%)  would seem to indicate that more lows are being sought after by the masses.

Stop loss hunters / Market makers like to throw counter expectation wrenches into the machine, and send the occasional wicks up (more easily achieved in the retail dominant markets, that are weekends).
However on Saturday's the Daily Turnover is usually higher than Sundays' so I expect the day to be about as tumultuous as your typical week day's.

Therefore, the majority of my days scalping shall be long positions, buying the returns to the trend lines with advancing stops.

12:00 (UTC -4)

There was a deviation from the trend line, and my orders at the green and red were filled.
The 15 min stochastic RSI was well into the oversold region at the time of the last post. So I doubled up my order once the stochastic had bottommed at about $21200.

Suspecting that we would face some sort of selling pressure at the $21,300 level I moved my SL up to $21,285, where I was subsequently stopped out with about ~20% profit.

I did that despite the stoch RSI only recently venturing above the 20 region, because we were pulling back from the former diagonal support.
I was thus protecting my profits gained from being lost in a support resistance flip.

The price protruded further through the trend line to a high of $21,343 before retracing and getting rejected off of the trend line establishing a lower low.

The trend is still going up, and I will continue to scalp long.

13:34 (UTC -4)

Stopped out ~ 45%,
TP was at the underside of the trend line, however we couldn't achieve the $23,300 level.

21/08/22

It did seem to be up only from that point yesterday, counter to what the masses were calling for.

I am in another long position this morning, despite the masses expecting the price action to go south.

Another purchase order has been placed at the inferred trend line, should we deviate from my trajectory with a SL soon after.

The daily turnover is half that of during the week's so there is the expectation that the price action will be especially erratic.

Fasten your seatbelts…

No sooner than when I hit publish, $BTC plummeted to the trend line filled my buy order, bounced off and I had time to move my SL to 10% profit and was shortly stopped out.
I have re-stationed another order on the trend line.

It seems to have been up only since leaving that trend line / my getting stopped out…
I managed to get another entry in lower than on my original order and have flipped irresponsibly long. 

—TP currently positioned at the underside of the white trend line, I am currently on the receiving end of the funding and will try to resist the desire to advance my SL and see if my TA is good for activities other than those associated with Polynesian aboriginals…
i.e., trading and not just scalping.

The low daily turnover compared to the regular week on Sundays proved to have not been the ideal time to switch from scalping to trading, a darth maul candle on the 4 hourly stopped me out and some losses were sustained, but I switched back to scalping and recovered my losses and climbed a little bit higher in the rankings.

This is the last update.
New week, new article.

Just Sharing what I'm seeing / doing

Draw your own charts

Banter On, Banter Strong!
✌️