Mid-term Correction Outlook for Bitcoin
The Bitcoin market has been very volatile recently, and I still hold the view of a mid-term correction, remaining cautious of the trend change risk that may occur around May 19. Intra-day analysis indicates that Bitcoin may pull back to $102,700. Although the market seemed to show a V-shaped reversal yesterday, it did not stabilize at the crucial resistance level of $105,000, indicating insufficient rebound momentum. Altcoins may experience a brief frenzy today, but after the celebration, the market could face adjustments, and investors should be cautious about chasing highs.
Yesterday's Analysis and Market Feedback
As mentioned in yesterday's video, Bitcoin is likely to break below $100,000 due to the lack of a clear V-shaped reversal, and the adjustment structure may be complex. However, yesterday's daily candle closed bullish, resembling a V-shaped reversal, leading some investors to question the analysis, and even getting trapped in short positions at $103,100. It needs to be clarified that market predictions do not materialize instantly, and extreme volatility is the result of the tug-of-war between bulls and bears. The market often gives investors hope at high levels, inducing them to chase highs, leading to being trapped. The numerous failed high-level chase cases in the past year indicate that chasing highs carries extreme risks, especially when technical indicators show a downward trend, so investors should remain cautious.
Trading Strategies and Risk Management
I gradually built a short position of 0.2 and 0.4 Bitcoin at $103,100 and $104,860 respectively yesterday, and my overall cost is still in a profitable state. The stop loss is set at $106,200; if this level is breached, it indicates a potential new high, and I will acknowledge the trend accordingly.
Technical Analysis: Daily and Short Cycles
From the daily perspective, Bitcoin closed up yesterday, forming an engulfing pattern, but did not break through the key resistance at $105,000, suggesting that today may still see repeated fluctuations. The RSI indicator shows that the previous day's bearish candle had already entered the regular zone, and yesterday's rebound re-entered the overbought zone. If today closes at $102,700 or below, the RSI will further confirm the adjustment signal.
On the four-hour level, the support-resistance conversion level at $103,600 has been broken, and MACD shows a 'skydiving' state, indicating increased bearish momentum. On the hourly level, MACD has shown multiple top divergences, and RSI is close to oversold, suggesting that short-term support may be found at yesterday's double bottom neckline (approximately $102,600-$102,800), making it suitable for short-term long operations.
Opportunities and Risks in Altcoins
Altcoins may see rotational trading today, especially Ethereum which has a relatively healthy trend, making it a priority for short-term longs. Other coins like ADA and Ethereum-related projects (like Uni) may be considered for short-term entry if they pull back to the $6.3-$6.5 range, but strict stop-losses are necessary.
ether.fi and Rez have seen a surge, and trading sectors may experience rotational trading. Investors can participate with small positions but must remain cautious.
Correction Risks After the Frenzy.
Liquidation Map and Short-term Strategy
The liquidation map shows that the $102,600-$102,800 range is a dense area for long position liquidations, making it suitable for short-term longs. Short positions can take partial profits (60%) here, while the remaining position should be monitored for further declines. Short-term rebounds can involve small positions in Bitcoin or Ethereum, but strict risk control is necessary to avoid losses from chasing highs.
Risk of Trend Change on May 19
Historical data shows that trend changes often occur around May 19. Last year, after a sharp rise on May 20, those who chased highs were trapped when a double top was followed by a sharp decline. A similar pullback occurred on May 19 the year before. Combining Fibonacci time cycles, a trend change may occur again around May 18-19, which could either break below $100,000 to the $90,000 range or break to new highs. Investors should prepare mentally and monitor whether the weekly MACD golden cross is confirmed. If new highs stabilize, consider going long in line with the trend to welcome the potential early stage of a bull market.
Summary and Investment Recommendations
The current market is still in the appetizer stage of a bull market, with the risks of chasing highs far outweighing the opportunities. It is advisable to remain patient and wait for lower buying points to acquire more positions. Protecting the principal is the primary task, especially as key dates like May 20 approach, cautioning against market fluctuations. If today's analysis is helpful to you, feel free to like, comment, and share. We'll see you next time.
