There Needs To Be Measurable Points In The Journey
Some argue that it is impossible to predict markets and therefore discourage “trying to time the market”. However, I disagree completely, one needs to have some sort of idea of where a particular market may be in terms of cyclical behavior. All markets and all assets experience bull and bear markets. Euphoria causes markets to overextend and fear causes markets to oversell. A bear market is simply a recalibration prior to the journey continuing. Don’t be afraid of doing research, or analysis because you believe, or are told, it is impossible. A good trader does two things. Firstly, he does excessive research and analysis to try and establish the most accurate possible viewpoint. Secondly, he remains humble enough to reassess his analysis if price action or other expectations deviate.
I know many have been calling for a bottom at $22K in the last week or two. My analysis on which I have based my investment thesis for this bear market bottom began approximately two months ago but I found the mark that I am basing my final move on approximately a month ago. This is the zone of $18K to $19K, revealed in a recent post from early May. This is still perfectly in play.
The channel I mapped out a month ago was perfectly respected by BTC today. However, this is all unfolding a lot faster than I had previously envisioned. So, what happens now?
Trading Is About Discipline
I mapped out this figure and so I am sticking to it. Today I set orders for alts approximately 30% lower than the current prices. Even though $22K could be the bottom, the macro picture is still encouraging me, as well as providing confluence that this is not over. Bearing in mind that the low experienced today for BTC was only $3K off of my target, I still believe another leg down is on the cards. I see it taking place one of two ways. We either see a solid flash down earlier than anticipated and form a “general bottom” that gets retested over the next few months, or we slowly continue and eventually bleed out to my anticipated target.
It is important to note that I had two bottom predictions. The best-case scenario is at the level I have just mentioned. The alternative point is mentioned in my post from May. This point is approximately $13K and derived from the falling wedge on the weekly. If this wedge is completely exhausted and the entire range covered, that is where we will exit, if we break up. This is a worst-case scenario and would only likely play out in a “swan event”.
What If The Worse Case Takes Us By Surprise?
If I am setting orders for my best-case scenario, what happens if we experience the worst? A lot of my fellow Crypto connections often joke about me! I am the guy who makes a backup plan for the backup plan, compounded many times over. I am going long on ETH between $700 and $900. I am also setting orders as low as $400. These do not have to trigger, it’s simply insurance. Passive income mechanisms will also be utilized in order to continue averaging into alts at “unexpected lows”. I will also still be holding onto an allocation of stablecoins. I never exhaust capital, never.
I Ceased Shorting
In a recent post published on the 10th of June, I stated that I would cease shorting the market between $22K and $20K.
Personally, I will cease opening shorts at approximately $22K to $20K. Even though I am expecting $19K, I would rather play it safe, even if BTC were to go even lower.
We have reached that point, discipline automatically kicks in. Shorting is now over, regardless of lower levels or not! We have really hit this spot at an alarming rate. Things can happen too quickly from here. The ultimate shorting zone was between $29K and $22K. Prior to that, there was too much uncertainty. This was a guaranteed shorting opportunity that I presented in an article on the 16th of May, almost a month ago.
Either way, I believe we are in the final stages of establishing a bottom. Please don’t confuse this with the end of the bear market. Furthermore, do not rule out that the bottom could be retested at a later stage, even if it holds. As always, these are my thoughts and views that I am sharing with the broader community. Do not consider this investment advice in any way. All the best, as we push on!