BTC Short Trade Opportunity and Setup
2024-10-24

BYBIT:BTCUSDT.P  /  BYBIT:BTCUSDT  /  CRYPTO:BTCUSD   Bitcoin/BTCUSD has recently hit the resistance level of a pattern that has generally held true since mid March 24 (4 preceding resistance and support confirmations). 

Furthermore, it has started a return downward move following on from a 3 day filter for confirmation of the resistance level (an example of how a 3/5 day filter is an important tool for crypto trading). 

Additionally:
 
  The RSI resistance level of 70 has been recently reached and the RSI is trending downwards - a usually statistically significant indicator
  The downward return move is supported by reasonable (although not enough on it's own) volume
  A 3 bar pattern (downward move, pause, further downward move for confirmation) 
  A rate of change approaching and trending negative
  A MACD also approaching negative
 

It's always important to assess the risk that might prove the thesis wrong. And they are:
 
  Today's candlestick pattern is close to a dragonfly, i.e. there might be a return upwards move imminent (although this is unlikely to constitute a beginning of a move beyond the previous high as an actual dragonfly candlestick is at the end of a downtrend)
  The MACD is trending down but has not actually turned negative yet, i.e. it is a bit early to say this indicator is stating a downward trend
  The ROC hasn't turned negative yet either (but is trending downwards for sure)
 

This all leads to the following conclusion: For those with a high enough risk appetite (and usually crypto traders are those with the highest :-)) this is a good entry point for a short trade.

Using the (admittedly early but still reasonable) trend for the past three days to determine the final take profit point of 45500 (blue arrow) by approx. 19 Nov 24, the following can be set as a guide for a trade:
Entry: Now or latest tomorrow in case today's candlestick is an indicator of a minor move upwards
SL: $70,500
TP1: $63,450 - based on the first potential moving average being a resistance (200 MA)
TP2: $60,500 - based on the previous move's consistent (and twice confirmed) low
TP3: $54,500 -based on a previous historic low (i.e. psychologically important price point) which also acts as a confirmation of support to a previous move
TP4: $45,500 - The approximate price point of an estimated downward trend
Exit date (independent of TP level): 19 Nov 24

NOTE: the 19 Nov date here is important. It is the forecasted date by which the current downward price trend would linearly reach the support level. This date would be used as a checkpoint to exit the entire trade to safeguard against the normal, usually dramatic and beyond rational calculation price gyrations of crypto.