While a buy and hold strategy has proven to be beneficial to the early Bitcoin investors, the late entrants have used the wild price swings to add to their Bitcoin numbers. We can see from the charts in this article that the whales have increased their Bitcoin holdings over the past couple of years.
In these price swings, an average trader buys at the highs and sells at the lows. We have been trying to help our readers avoid this pitfall. All along through this fall, we have refrained from suggesting aggressive long positions. But, do we find a short-term bottom now?
We were expecting Bitcoin to retest the lows after turning down from the trendline. But the bears could not break below the $8,000 mark.
Currently, the price is likely to face resistance at the downtrend line and above it, at the 20-day EMA. We expect the $8,600 to $9,400 levels to be a real test for the bulls.
If they succeed in breaking out of this zone, a quick rally to $12,000 might take place, where it will again face resistance from the 50-day SMA and the resistance line of the descending channel.
Therefore, the traders can wait for a breakout above $9,500 to buy. The stop loss for the trade should be kept at $7,800. The profit objective is a move to $12,000.
And what if the BTC/USD pair fails to break out of $9,500 and turns down once again?
In this case, traders should wait, resisting the urge to buy at lower levels because if the price breaks below $7,800, we might see it go down to the $7,000 point.
We always provide both the bullish and bearish scenarios because the traders should be aware of what to expect in both cases. It would be irresponsible to provide levels only in one turn of events.
source: cointelegraph Rakesh Upadhyay,
source: cointelegraph Rakesh Upadhyay,image by: trading view