Intraday nosedive, BTC goes down to 5,700 and bounces back up to 6k on some exchanges.
In my prior couple of posts, my viewpoint has been proven wrong today as BTC retests 5,800. My viewpoint given this is that I am becoming more skeptical 5,800 ultimately holds. Whether it holds, is not really a factor of market sentiment, or technical analysis. 5,800 holds only if there are buyers willing to draw that line in the chart, to hold it for the amount of selling pressure this support level faces.
Predicting market sentiment is more gameable than predicting what a small handful of big money investors are likely to do.
This sort of movement could see a brief bounce on the intra-day chart.
If such a bounce happens, it's not really indicative of bullish or bearish, but that when that bounce begins to move down again, at that juncture we watch it. If at that juncture, it wants to quickly go back to 5,800 or below, then this is highly indicative of 5,800 breaking to the downside. At which point BTC 4k ranges are on the table.
If however, such a bounce happens, and it stabilizes, then we could see more sideways movement on a daily basis.
Fast moves toward a support level that has been tested many, many times, is generally bearish. But whether it is actually bearish depends on a small number of buyers and what decisions they are making, which is not predictable. I believe the buyers have held 5,800 because they believe this is a decent long-term buy level. Yet at what point does their decision making change in favor of not holding this level? To this I am unsure. If their buy-funds are limited, they could choose to hold a lower level than they have been.
That all said, as I am writing this, I see more downward movement toward 5,800 again on Bitstamp. Sometimes, downward selling pressure is great enough to blow through support without much of a rally. This could be that instance.
Strategy
Depending on your personal strategy, and tolerance for loss, this is either a buying opportunity or a selling opportunity. I generally do not favor selling when you're down already, but if loss tolerance is low, watching the charts hourly might be worthwhile for today. If it goes to break 5,800, a person could sell quickly. If it begins to rally, a person could sell into that rally to cut losses, and then wait and see what transpires.
If however, a person is looking for buy opportunities, using a long-term average cost strategy, then today might be a day that they onboard 10% or more. With the recognition things could go lower, and then on-board possibly more in the near future.
Other points
- Altcoin trade is off the trable. Support line was broken. Today could be a buying opportunity, sure, but that sort of thinking operates under a different strategy and mindset than my trade I was discussing. Long-term, I still like EOS, Ripple, and several others. Yet if BTC Breaks 5,800, expect 20% + drops in these altcoins.
So either today is a non-event, and just a blip into sideways movement. Or today is highly important as 5,800 may soon be broken. I can't tell which we are facing for the moment.