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Bitcoin charts look ugly

3 weeks ago I posted warning “Bitcoin in trouble”  and looks like things indeed turned ugly. Several important supports were broken through with outstanding trading volume – which indicates some serious sellers behind.

We have just now approached previous lows – 6450-6500 support, further down is another significant potential bounce level – lows 5950-6000 from Feb 5th. I honestly do not know what will happen tomorrow but these levels proved to be a but zones in the past. However, technically it does not look good that price keep returning to these supports after ever declining local maximums. Look at below weekly chart – each bounce is getting weaker and weaker.

Bitcoin weekly June 12

Bitcoin weekly chart

So, what one should expect ?  Again, technical analyses is not looking at crystal ball and one can never say for sure – but  for now I would become extra cautious.

Let me put this way – if prices breaks through those last supports – then it could turn to free fall and panic sell. I am targeting 3200 and further 2400.  So, if you decide to buy now – watch your position carefully and place tight stops below. Do not forget that stops won’t help much during panic sell.

And important thing about adding to a losing position. I am getting a lot of crypto-investment analytics and most of those aggressively invite to buy bitcoin right now. Buy more and increase your position. Well, this sounds logical for many newbie traders/investors – what could be more logical if you are absolutely confident that bitcoin is bound to be around 100,000 by the end of 2018 ? Well, that is theoretically possible – but what if not ? Adding to a losing position is a very dangerous practice. It is one single biggest reason for total trading losses. I’ve seen so often – it is boring.

I will publish separate article on this technique that is called averaging but for now: if you adding to your losing bitcoin positions at current price levels in anticipation of another rally – watch carefully the lows of 5900-6000.  If they are broken –  then wise thing would be to cut your positions. Professional traders  cutting their exposure if market goes against them.

Safe trades !

 

 

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