Bitcoin Trading Analysis: Wave 4 New Buy Signal

Bitcoin continues to gyrate within the Wave 4 price structure, which implies there is one more leg higher before probability favors a broader correction. Along with that, there is a buy signal in effect now (the break of the 42,600 inside bar high). This signal appears at a relevant level (off 40K support) and IF momentum follows through, has potential to test the 45 to 46K resistance in the coming week.

Now keep in mind, while this appears to be a higher quality setup, it appears in the middle of a holiday week. This fact can reduce the chances of follow through since volume is generally lower. I have been warning about the lower volume holiday environment to help shape expectations effectively (especially for those who receive my Trade Scanner signals).

Volume is more likely to get back to normal levels mid week or into early next week. Does this mean you should avoid signals? That would be the conservative choice. In my opinion if you want to take a signal, just trade smaller than usual size. If the momentum fails to follow through you lose less.

The key thing to consider is this: as long as Wave 4 does NOT overlap Wave 1, the bullish impulse still stands. This serves as a guide for objective and reasonable expectations. For example, momentum may fail and price may test 40K for a third time. If a new setup appears in such a scenario, I would consider this an even higher probability, especially if we are outside of the holiday volume.

The line illustration on my chart (Wave 5?) is what I consider the ideal scenario. This is NOT to be confused with a forecast because there is NO way to know if price will play out this way. These illustrations have not played out numerous times which is the nature of a m arket that is MOSTLY RANDOM (not always random). The idea behind this is to be prepared IF price confirms, and use this to gauge reward/risk.

If you intend to trade/invest for capital appreciation, your goal for the new year should be to focus your attention on the professional side of this business. This type of information exists in the form of academic papers, legal complaints, and professional associations, NOT Youtube. More time in front of charts WILL NOT matter if you do not understand what is going on behind the charts.

A big thank you again to the community for your encouragement and support over the year.