Bitcoin Plummet Was Expected – Why? for KRAKEN:XBTUSD by TraderNeoh

Hi Traders, today we’ll be discussing my Technical Analysis on Bitcoin and why did i called a reversal earlier on 25th October around the 68k area.

Bitcoin has been in a strong rally ever since Covid-19 outbreak, definitely a hot instrument to trade. Whichever trading platform or community you go, everyone’s talking about Bitcoin heading to 100k mark. Do not get me wrong, I do agree Bitcoin could possibly head towards the 100k price level, but in the short-term, it needs to pullback to balance out the supply & demand factor.

Think about the market psychology, when everyone’s chasing the buys, Bitcoin’s is set at an overbought condition. When a market is extremely overpriced, it will eventually return its short-term true value. It has nothing related to market manipulation, it’s just how supply & demand works. When one side is pressing so hard, market finds insufficient buyers due to its overpriced condition which causes a slow down in uptrend, then sellers find opportunity to take advantage of the short-term selling opportunity. Naturally, it will create a Price Action where price halts around the previous high, grinding lower indicating multiple failures, then have that sharp drop when supply has completely overcome demand.

So, when Bitcoin returns to a reasonable price, big buyers will naturally step back in.

It all goes back to one thing, which is the failure to understand the difference between short-term trading and long-term investing. If you’re a long-term investor, most likely you’re not so concerned about the short-term price fluctuation, either you have a smaller size to protect the downside, or you’re buying at a very reasonable price where noises doesn’t cause any impact on your portfolio. But if you’re a short-term trader, it is your job to develop a strategic trading plan and strategies, to enter and exit at the best price possible. If you’re a short-term trader chasing highs, a big swing downwards will shake you off because of your risk exposure due to the leverage.

Let me know your thoughts on Bitcoin on the Technical side.

If you enjoy the content, make sure you follow my profile and give me a thumbs up for daily fx forecast & educational content.

Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button