BTC nearly breaking into recent highs and reasons to be cautious
BTC/USDT, 12h
Neutral
The swing pattern failure that we were watching for on the 12hr chart looks to have occurred on smaller timeframes. This can be seen by BTC breaking the overhead resistance, making a new recent high price, and then quickly losing that support level. This shows that buyer’s did not jump in to buy up BTC where they are “supposed” to.
Because of this, I am watching for this short play on BTC, the closer the entry is to the resistance line the better however these bull traps tend to drop strong when they do occur:
BTC is nearly breaking above the $25k level, a level that many people say is what needs to happen for a bull rally. BTC is very good at clearing into new high territory before reversing direction shortly.
In this particular case, There are many short liquidations that will occur just above the 25k level as that is where many investors have a stop loss placed for their short positions. When price action hits those stop losses, those investors go into bullish momentum and want to ride the market higher to offset their losses. And this is a perfect scenario to create a bull trap and then drag the market lower.
So am I am hedging my bets and shorting pre-maturely? No. I am simply in no trades and observing what is happening and being aware of the overall possibilities and outcomes for BTC. I’m choosing to let market structure develop and will take trades as structure develops that give me an edge to the trade.