I actually bought bitcoin just about an hour ago. I have been all cash in my crypto account since Feb 7th. Up 20% for the year in crypto and this trade was too good to pass up. Bought at the trendline support at $35.5k today. I will sell it if it goes more than 7% below the trendline and take my medicine, but the plan is to hold until it hits the top trendline at/around the $48-50k mark...
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The reason I plan on selling if it gets to that point is:
A. Its a 40% gain.
B. If it breaks through the top trendline, I don't mind buying back in above $53k or so.
C. If it gets rejected, that is confirmation of a bearish technical pattern called an ascending broadening wedge. Downside target would be $18k if that pattern played out by the book. And it’s the second bearish pattern that has picked that target as the destination. Not saying it will happen, but it’s just playing the odds like not hitting on 12 when the dealer has a 6 card showing in blackjack.
"Textbook" ascending broadening wedge, target is the distance between A-F down from the break through of the trendline.
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How BTC is looking right now on a daily chart...
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It's not a super reliable pattern. Over 50%, but the fact that it follows a head and shoulders pattern that is still technically in play until we get above $53k or so, makes me give it a little more respect.
To PB and Wagstaff... I am not bearish BTC. I am short term bullish buying off of this trendline. Once it gets to the top trendline, I am going to take a nice win. If it goes up from there. Great. If it comes back down I have locked in a sweet gain and I have plenty of losses in my stock portfolio to offset against it for tax purposes.
This is not investment advice. Notice my blackjack comparison. I know what I am doing/risking/etc. I suck at betting on sports, don't live anywhere near a casino, and seem to do pretty well at trading bitcoin of all things. Plan on taking the gains and flying my sister and law and her boys (12 & 14 and have grown up without a father) out in July for a 3 day whitewater rafting trip. If I get stopped out on this trade, I am still going to fly them out and do the rafting trip, I'll just have a lot less in the old crypto trading account after paying for their trip. Getting those boys that have never left Texas out here in the mountains and on the water for a few days is by far the best investment I will make this year.
I will let everyone know how it works out since I imagine you are all going to be on pins and needles waiting to find out. Most likely scenario since I bought is it breaks the bottom trendline now and stops me out at a 7% loss tomorrow.***