$USDC Bitcoin has remained around the 95K resistance area over the past week. In my opinion, this is the completion of subwave iii (5 mini waves can be counted within the bullish breakout leg). This implies that there is a higher probability of a pullback or subwave iv (see wave count in the chart). The pullback could go as low as the 90K support without overlapping subwave i, which would keep the bullish momentum in play. There is also enough evidence here to suggest that this structure is likely the first wave of the broader wave 5, which could see a test of the high of 109K in the coming months.
The current high (see arrow) shows signs of possible reversal in a place where such a pattern could be expected. The question is, when will it pull back and how much? It’s anyone’s guess. This is where you need to have the ability to adjust as the market provides new information. Until then, the best we can do is evaluate loose probabilities and wait to see how the market aligns or not.
The adjustment process is twofold: evaluate support/resistance levels and assess the RISK associated with a given scenario. For example, the illustration in the chart shows a pullback to 90K; this or some variation of this scenario may or may not develop. The key is to have levels identified in advance and then WAIT to see how the market behaves at those levels. Does it confirm our idea or not? In the case of Bitcoin now, the resistance area at 95K holds, and a reversal pattern has appeared that adheres to the pullback scenario, but how far it pulls back depends on Bitcoin. We have to wait and see what kind of bullish reversal appears and where it appears before the RISK for a swing trade in this timeframe can be assessed.
Markets that remain around levels can be very difficult to trade if you are the type who forces trades or asserts opinions. Slow movements are especially hard to endure, which is why I always suggest evaluating smaller timeframes while keeping this bigger picture in mind. There are many smaller opportunities to capitalize on if you can recognize support/resistance levels and trend structure in the smaller timeframes without losing sight of the bigger picture.
In this timeframe for swing trades, I am not interested in the short side. I prefer to wait for the pullback (wave iv) to see how far it goes, WAIT for confirmation of the reversal, then quantify the RISK from that point. IF this scenario appears, I would anticipate a new test of the 100K resistance and expect a higher probability of a breakout to a higher high (low to mid 100Ks)? This may take at least two weeks to develop, in my opinion. And if this scenario does not develop, then adjust to the new information that the market is presenting.
