Bitcoin 58K Resistance Tough Spot For New Longs
The scenario I am WAITING for in order to consider a new swing trade long is a retrace back to the 48 to 50K support. That was a previous resistance and now more likely to attract buying activity within the context of the current bullish structure.
What I need to see is price test the support and provide a confirmation. This can come in a variety of forms, but the more common would be a bullish pin bar. This is important to recognize because it will define the risk in terms of the market. Typical risk on Bitcoin has been around 4K points recently.
If price breaks the 48 to 50K support, (anything is possible) the next area to consider is the 44 to 46K area (previous minor resistance).
Keep in mind, Bitcoin may not retest 50K. IF this more aggressive scenario unfolds (price breaks the high of the current red candle), it will have to run to at least the low 60K area to justify the risk. Since there is a lot of resistance between 60 and 62K, I anticipate that the probability of such a move is lower and not worth the attention and monitoring required to manage the position after a breakout attempt.
Only you can determine which scenario is more appropriate for your risk tolerance. Taking trades or reacting to movements for the purpose of chasing rewards is not effective in this game. Focus on RISK first.
If you would like to know more about my swing trade strategy, visit https://greenbridgeinvesting.com/pricing
This article was originally posted on FX Empire
