As Bitcoin continues its attempt to break through the current downtrend, we have directed your attention to the logarithmic (log) downtrend and uptrend for reference points for the bear market price action. We have vehemently stated that we do not believe a bull market can return if the logarithmic downtrend that was initiated at the 19k levels, is not broken📈
The log downtrend has acted as a resistance but has been countered by the year long uptrend, which has acted as Bitcoin’s support
This log uptrend came into play when Bitcoin reached the $5900 levels. The resistance and support levels have worked as a wedge. Bitcoin’s price has bounced between this wedge for almost 90 days now, and we are approaching a pivotal point in the price action. The wedge is tightening and eventually the price of Bitcoin will have to break upward or downward rather violently, depending on the dynamics of the wedge.
The pivotal price point we are referring to is that Bitcoin is, once again, about to retest the log uptrend support at the $7600 levels. We believe there is a chance for a bounce off the support to the upper regions of the wedge. All aside, it is important that we address some different options we use to mitigate risk. Please remember that we are not financial advisors and Bitcoin Bravado isn't a financial services company. This is just how we're evaluating the state of the market as active investors in it.
To prepare for the potential break downwards, there are a couple of strategies that remain important to consider at these times. HODL, arguably the most famous, meaning hold on for dear life, is a well known approach most people employ. Some long term investors prefer to build the best cost averaged positions in long term investments over time. If the constant monitoring of price is not the approach you want to take, then just enjoy other aspects of life and let cryptocurrency recover in time.
Another strategy would be to sideline a percentage of your portfolio to mitigate your risk profile. Although we have not broken the support regions at 7600-7700, we are coming dangerously close. In the event of the wedge movement driving the price below support, a sharp sell off may occur, but if a percentage of your portfolio is already in fiat, you will, then, have a great buying opportunity on your hands! If the market bounces hard you will miss some upside with this approach - but it's all about risk VS reward. You have to make your own decision. About a month ago a few of our analysts were very vocal across social media about sitting on the sidelines; it's worked for them thus far.
We are looking for a bounce back to the 10k region so that we can tackle the resistance at those levels. If we move in that direction, it would be our fourth test of the log downtrend, and we would be extremely confident in Bitcoin’s ability to break resistance on this attempt. But our community has to be flexible and create trading strategies for all possible outcomes!
Note the wick and the current candle position. You can see why we thought these were such important levels of support📊