Second Bitcoin Buy Signal Off Support

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Updated: Dec 15, 2021, 08:32 GMT+00:00

Recently I publicly shared a swing trade long idea for Bitcoin based on the recent inside bar formation that developed around a high probability reversal area (46 to 48K higher low). While there was no follow through, the support area is still in play and a new signal may be in the process of developing.

Smartphone,With,Bitcoin,Symbol,On-screen,Among,Piles,Of,Golden,Bitcoins.

Since the dramatic sell off to 42K, price action has established some form of stability around the lower 40K area in the form of a double bottom, higher low pattern. This is very compelling for swing trades because this price area has been notable historically for a greater potential of buying activity (see horizontal lines mentioned on the chart).

A new inside bar formation has been established and a new buy signal can unfold from this particular reversal pattern. The thing is, the current corrective structure (lower highs, lower lows) is still in play as well.

This conflict can be confusing and why I would classify this potential signal as aggressive.If the corrective structure beginning at the 69K high stays intact, it is still reasonable for price to test the 42K low again.

Along with the price structure conflict, the Federal Reserve is having their interest rate announcement and press conference around 2 PM EST. While Bitcoin usually does not overly react to such information, it is probably a good idea to not rush into anything until after the event is out of the way. As I always remind my followers, RISK first.

The more conservative thing to do is WAIT for the corrective structure to be compromised. This would be the case when price takes out the lower high established recently at the 50K level. From there, any buy signal off of a higher low would at least offer a greater possibility that momentum is on your side.

If you would like to know more about my long only swing trade strategy, please visit.