Bitcoin: Watch For B Wave.

Bitcoin price structure has not changed much since the FOMC and NFP events of the previous week. The 40K key support that defines the broader trend is STILL intact. This means my swing trade idea (long off reversal from 40K area) still stands (see illustration on chart). What I want to point out is IF price does not retrace to 40K, but instead breaks higher into the 43 or 44K area (minor resistance) this could be the completion of a minor B wave (see chart).

How you utilize this information is going to strongly depend on what type of strategy you seek to employ. For day traders, the break above 43K signals bullish momentum which can lead to the 45K test. During this process of price working its way to such levels, there will be many opportunities on smaller time frames if you are looking for small bites. You have to have a clearly defined setup though otherwise you are looking at random results.

On my chart I also highlighted the 41,600 area minor support (small blue square). IF this level is cleared on the bearish side, it signals the broader pullback that I have been anticipating for the swing trade long idea. This level also servers as a point of reference for day trade setups on the long side.

The B? Wave refers to the minor bullish retrace that may contain 5 or more likely 3 subwaves and complete somewhere in the 45 to 46 resistance area. IF this occurs and a bearish reversal appears, it would be a good idea to anticipate the first bearish C wave (not the monthly one). This can take price back to 40K relatively quickly. In this particular scenario I would not be so quick to jump on longs BECAUSE the 40K will be more likely to break. This scenario assumes price is coming off the 45K resistance (which means a LOT of longs are getting pushed out).

As I have explained in previous articles, navigating any market effectively requires the ability to adjust expectations as the market provides new information. This is NOT a game of trying to guess the future. "Information" comes in many forms, and MOST of the information that is pushed our way (news, opinions, analysis) has NO actionable value. It is the equivalent of watching cartoons about finance and believing you are now "informed".

There is more than enough information on a naked candlestick chart to make effective decisions especially for shorter time frame strategies. Less is more in this game. Do you want a good place to start? Identify support/resistance levels with horizontal lines on a daily time frame. Project the lines into the future and observe how price behaves around those lines. That alone will inform you more than most of the "free" information out there.

Thank you for considering my analysis and perspective.