Trading Bitcoin: Bulls Finally Wake Up

Bulls Finally Wake Up

Bitcoin is up 3% today as the bulls finally wake up. On the daily chart above, Bitcoin is on a red 3 of 9 candle. If you were trading based on sequential theory, a short trade was activated yesterday when price gave us a red 2 which closed below the previous red 1. However, you would still be in this trade because price did not go above the previous red 1, which is the ideal stop loss. While sequential theory told you to place a short trade, typically you don’t want to act on a 2 candle following an engulfing 1 candle. The same is true for an engulfing green 1 candle.

4 Hour

On the 4 hour chart above, Bitcoin has reached a bullish green 4 candle. Also, the Lucid SAR (blue x) has recently shifted into a bullish support zone below price. Both of these metrics are ideal signals for the bulls. If you were trading based on sequential theory, a long trade was activated when the green 2 closed above the green 1. If you took this trade you would be sitting with a short-term profit (based on a 4 hour timeframe).

Cryptocurrency News

Mark Zuckerberg appeared in front of Congress yesterday to discuss the future of Facebook’s cryptocurrency Libra. Congress grilled Zuckerberg and were very hostile toward the idea of a corporate currency project such as Libra. It is apparent that Congress is asking the wrong questions. For example, one congressman asked if minority and LGBTQ individuals lead the companies within the Libra association. While minority and LGBTQ representation is essential for societal progression, Congress should be more concerned with Bitcoin’s ability to replace the dollar as a universal store of value and a reserve currency. The fact that they remain evermore ignorant is a testament that technology will always evolve faster than governments can regulate it. Just look at the lack of regulation and government research around electric cars, AI, tech corporations and privacy invasion, Juul, and cryptocurrencies.

Conclusion

In yesterday’s article, we noted that Bitcoin was bearish, however, if strength comes in toward the end of the week it may be an optimal time to stack sats. However, we still need Bitcoin to reach a green 1 or 2 on the weekly chart until we can be bullish when discussing the macro trend.