I’ve been keeping an eye on the weekly chart of Bitcoin and some other big cap coins. Starting this week they all looked a bit extended and I was 50/50 on whether price would push higher.
For a while price did, but with the sell off in recent days you can see price is digesting the prior move (or maybe purging).
A Bigger Picture
Looking at this weekly chart of Bitcoin we see what is a huge reversal type candle that will be formed unless we get a sick rally in the next 8 hours.
That upper wick is one of the biggest I have seen and shows sellers came in hard above the 11,500 area, which ironically was my upside profit target when BTC pushed above 10k.
It’s hard for me to get long when seeing this type of price action on the larger timeframe.
There was a rule that I was taught often back when I was a full-time equities trader.
- Larger Time Frames Dominate
This is not to say price cannot go higher in the near-term. In fact price could rally 1k or more points and still technically not breach the reversal candle.
It is a warning signal though – that price has a higher probability of moving lower before it moves higher over the next week.
I’m trying to decide if I want to lighten my BTC position or not to be honest.