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Re-examining BTC volume on flag breakout 9/2/21 for BINANCE:BTCUSDT by Zulu_Kilo

Yup, this is trading folks…

I was stopped out on my short trade because we had a low volume bounce at the bottom of the trading range.

If you saw my last analysis, my thought was that we would be breaking far below the trading range, which didn’t happen. Some solid clues to the bounce on the technical double bottom was that the second bottom (which we are now identifying as SOW) bounced on low volume …. Meaning, there was no intent by market maker to push further down.

The SOW (sign of weakness) in our Wyckoff trading range did not break below the trading range (which it does not technically have to for it to be a SOW).

You can see in that the flag formation was broken through at the top with pretty decent volume . We have retraced back towards the top of the flag and we are now starting to see low volume again on the retrace back to support, which usually indicates that price is ready to go up into upthrust and temporarily clear the range. This is a temporarily bullish sign….. Again, this is a move meant to sucker in retail traders to think that upwards is still the overall and long term trend so key players can get rid of their bitcoin at much higher prices.

While it was in our favor to do a stop loss in our short position, we have to start realizing what is actually happening here. WHY price is going where it’s going. WHAT the objective is for market makers.

Most people will call this a bullish sign, and make no mistake about it, for the short term – there is very little doubt about that. But trading is not just about a very narrow short term view.

While you may get stopped out of your positions, this should be a very natural effect. You should not be weary of losing a little so that you can gain much more in the long term. Stop losses do not make you a bad trader, they make you an EFFECTIVE one because you have a clear understanding of where to cut small losses for the greater good. Eventually, this is a winning strategy.

The technicals are this:

Clear and pretty strong breakout of flag with decent volume . Price is retesting broken resistance. You will NOT always see price touch the top of the flag again, although this is not to say it wont or can’t.

We are seeing low volume on the retrace, which is indicative of a bounce. Based on that assumption, we can say that SOW may have likely happened and price is ready to jump further up to upthrust phase, which is basically market makers pushing price up higher so they can sell their bags for good profit before the rug gets pulled on retail.

Keep an eye on volume , if it stays nice and low like it has been, it’s a good sign of a bounce up from here. 49200 has been a pretty steady level it looks like.

Have a plan for stop loss if you go long here, a candle that breaks below the top of the flag with high volume should give you pause for your long position and this could have been a bull trap all along.

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