#MarketPullback Let's walk through a real-world trade based on Bitcoin’s recent pullback to illustrate the process step-by-step:
1. Market Context & Trend Analysis
Bitcoin hit an all-time high (~$112K) around May 22, then pulled back to below $109K the next day—a mild 2–3% dip due to some macro headlines .
The overall trend remained strongly bullish, supported by ETF inflows and long-term holders picking up positions .
2. Identifying the Pullback Zone
We use Fibonacci retracement from the recent swing low (~$89K in late Q1) to the $112K high.
The 50% retracement level rested near $100K–$101K, aligning with a key psychological support—the price briefly dipped below $101K on June 6 .
3. Confirmation with Indicators & On‑Chain Signals
The RSI approached neutral/oversold and started turning upward—this is a healthy pullback signal .
On-chain data: “whales” (>=10 BTC wallets) were accumulating, while retail was unloading —a classic sign of potential price recovery.
4. Bullish Reversal & Entry
Entry point triggered around $100,500–$101,000 when price stabilized and RSI began rising.
Ideally, wait for a bullish candlestick (e.g., hammer) closing above this region for added confirmation.
5. Risk Management: Setting Stop-Loss
Stop-loss placed just below the $99,500–100,000 zone, slightly under the 50% Fib.
This keeps your risk limited (~1%–1.5%) if the pullback unexpectedly deepens.
6. Define Profit Targets
First target: previous high (~$112K).
Second target: extension levels like the 1.272 Fib (~$115K–$116K), if momentum continues.
7. Position Example
Entry: $101K
Stop-loss: $99.5K (risking $1.5K per BTC)
Target 1: $112K (~$11K profit) → ~7.3:1 reward:risk
Target 2: $115K (~$14K profit) → ~9.3:1 reward: risks
8. Trade Management
Scale out one-third of position at first target, move stop to breakeven.
Let the rest trail behind, locking in profit as the trend extends.
🔍 Summary: The Pullback Play
Step Example Levels
Trend Bullish, record highs