Bitcoin sliced through a weekly trend line in September and is now consolidating into a daily flag pattern.

Bitcoin

Bitcoin has now found resistance at the 61.8% Fibonacci from August high to September low range.

It is extremely important to look for bearish candle stick patterns for confirmation and once entered, it would be wise to move the stop loss to break even with any rejection at the trend line.

 

Key Points:

  • Caution – Price above the 200 EMA
  • Caution – Price above 50 EMA
  • 8% Fibonacci resistance level using August high to September low range
  • Bearish candlestick pattern for entry at optimal distribution zone

 

 

Key Levels:

Support – 50 EMA, 200 EMA, 10000, 9500

Resistance – 11750

 

Entry Zone:

Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.

Optimal Entry – 11509

Supporting Entry – 11320

 

Candle Reversals for entry

  • Bearish Shooting Star
  • Bearish Engulfing
  • Bearish Dark Cloud Cover
    Bearish Engulfing, Shooting Star, Dark Cloud Cover

 

The Risk:

As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.

If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.

 

IF: Price breaks above 12159– this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.

 

Reward / Reward Targets:

Optimal Entry 11509 – Target 1 10000 = 2.3x Reward to Risk

Optimal Entry 11509 – Target 2 9500 = 3x Reward to Risk

Supporting Entry 11320 – Target 1 10000 = 1.5x Reward to Risk

Supporting Entry 11320 – Target 2 9500 = 2.2x Reward to Risk