Opinions
Crypto Talk with Terence
Bitcoin (BTCUSD)
CRYPTO:BTC
WATCH
Mar 25, 2022
Stock price when the opinion was issued
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CRYPTO UPDATE
The triangle we spotted on Bitcoin was very effective and broke its resistance with a nice candlestick that made it take almost 6% in one day.
The take profit target is still located at $56,000, close to an important supply area (many sell orders pending in the order book). The price is currently operating a pull back on the resistance zone it broke recently, this is perfectly normal and occurs in about 60% of cases (Chartist analysis, by Francois Barron), this could also be a very good entry for investors who missed the low of the triangle and its breakout (we can also wait for the breakout of the last high.
Investors who took position at the low or middle of the triangle currently have a nice profit (+20-10% at the time of writing, +30-20% at the high), and can expect much more, if the pattern materializes until the end. The most sensitive (and they are right) to money management have already moved their stop loss beyond their entry point, and can no longer, regardless of future developments, lose money.
It is interesting to note the high correlation between Bitcoin and other cryptos. Indeed, since the break of the triangle on Bitcoin, the main other cryptos have all experienced interesting gains this week, including Ethereum (which also broke a triangle from above), and Solana (+60% for a week). The case of Solana is very interesting because we had two chartist figures, a triangle and a triple bottom that led to this rise of 60% in 1 week and 80% since March 11.
Although probabilistic, chartist analysis remains an extremely powerful tool to evolve with more confidence in the chaotic financial markets, no matter what the detractors say, provided of course to retain this elementary but crucial rule that is missing to 90% of investors, and allowing to extend its life (in the financial markets) on the long term: to have a perfect control of its money management.
CRYPTO UPDATE
Last time we saw that BTC was oscillating within an ascending triangle. The pattern has been effective and the price has indeed touched the $45,000 mark today, which is the resistance of the triangle and an area that many economic players are positioned on.
2 scenarios seem to be taking shape:
Traders who entered on the bounce on the triangle support are in profit and can choose to close their position now, or wait for the triangle to break and strengthen their position if it does. They can also choose to raise their stop loss to break even if they don't want to take any risk in case the price bounces back as seen in point 2. For the others, it would be quite risky to go long now, as long as the supply zone has not been clearly broken. Finally, the most reckless traders (who like to play against the trend while having a good command of money management and derivatives allowing to short) can try to rebound on the supply zone with a stop loss at $46200 and a take profit at $40,000 for a reward/risk ratio of about 3/1.