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.
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 !