Bitcoin’s swings have been so violent lately that you could almost forget that it’s just another trading vehicle, the unwitting slave of Hidden Pivots. For all of last week’s whoops, swoons and histrionics, it looks bound for p=31,800 of the pattern shown. That would leave open the possibility, per ‘Matt’s Curse,’ of a rally exceeding C=42,557 to negate the bearish pattern. For trading purposes, I’ll recommend using a ‘reverse abc’ pattern where a=38,226 ( 5/20 at 2:00 p.m. ET). Initial theoretical risk would be $1007 per unit. Plant your point ‘c’ low only if and when this vehicle has come down to at least 31,820. Alternatively, and only if you understand the risks of trading this rabid badger, you could buy 31,820 with a stop-loss as tight as 31,300 (that’s 1.5%). ______ UPDATE (9:43 p.m.): The ‘reverse abc’ trade suggested above would have produced a gain of at least $1o11 in under 20 minutes if you bought one lot at x and cashed it out at the red line. Here’s a chart that shows it. Alternatively, notice that BRTI subsequently tripped a textbook-perfect ‘mechanical’ entry at x when it pulled back to the green line around 2 p.m. That trade could have been worth as much as $12,000 if you had bought a typical, four-lot position and held it to D=35,185. Our usual practice is to exit half at p, another 25% at p2 and the rest at D. That would have netted you a little more than $7,000. If you did either of these trades please let me know in the chat room what vehicle you used, since I am still trying to determine which bitcoin proxy to use for trade recommendations. _______ UPDATE (May 25, 11:05 p.m.): An uncorrected pop through both peaks, the higher of which lies at 51,556, is needed to rejuvenate the bull market. Anything less is just noise.
BRTI – CME Bitcoin Index (Last:39,228)