Uptober it is!
A couple of weeks ago I wrote the tradeletter and asked myself the following question: are we going to see Uptober or Rektober. In that specific tradeletter I explained what was necessary to see further upside momentum on Bitcoin. Well we all know what happened next. We good an insane push towards the upside and we almost reached $37K (on some futures pairs)! The strength in the market is insane when you really think about it and we are seeing some euphoria overall. In this tradeletter I am going to discuss what we would like to see next for further upwards momentum and if it is even sustainable to push this hard towards the upside.
Monthly timeframe
Let's start off on the monthly timeframe. With the latest push we can see that we had a very good development on the monthly timeframe. At the moment of writing this tradeletter we are having a bullish break of structure on the monthly timeframe again, which is definitely a good sign for bulls
However, yes it is looking good, but we need to take in consideration that we are currently trading in a bearish monthly Fair Value Gap. The monthly close is in a couple of days and this means that we could see a complete change in scenario, but for now price is acting fine. We are currently consolidating which is normal after such a run towards the upside, but more about that later in this tradeletter.
What I would like to see for bulls is actually a candle close that looks like the how the candle is formed right now. We had a convincing break above the most recent high of 31.8K which is crucial for further upside momentum. If we close the candle like this, we can say that we have printed another higher high. If we close below 31.8K, my thesis will change from bull to bear, but for now we have nothing to worry about.
Daily timeframe
One of the tough things after such a pump, where are you going to step in again? Well when we take a look at our current dealing range, we can of course conclude that we are trading at a hefty premium right now. As I have mentioned a lot in previous articles, you should buy when price is trading in discount. The optimal trade entry is often a good reference point. In this case it also comes in line with previous resistance levels, which gives additional confluence.
1H timeframe
If you want to get more aggressive you could zoom in a little more into the 1 hour timeframe where we can see that we have an untested orderblock around 31K. which is inline with the previous range high. It is not something I would recommend now and should wait how price develops over time, but it is something to keep in mind.
In conclusion we can say that everthing is starting to look a lot better! Curious to see how the monthly candle is going to close and that will tell us a lot more about what to expect in the near future.
Written by: Daan Foppen
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