As I write this, bitcoin has crossed the $19k mark and is holding. We're about $400 from the all-time high of $19,665, then it's all about $20k. I won't lie; I'm a bit excited just to see this piece of human history play out.
I've also experienced enough loss in investments to know that I need to look ahead. Bitcoin will have a pullback, and possibly a very serious one. I'm not so much worried about my BTC. I've decided to hold that regardless. But when bitcoin pulls back, all of the other stuff I hold will likely pull back, too. In just the last 5-7 days, I'm up like 40% on my total portfolio. I don't want to lose that in the cycle, plus I take pride in being able to ride waves as a trader.
So what will I be looking for to anticipate the correction?
1. Bullish acceleration will slow. I love to watch price action and read the ticker rather than watch candlesticks when I'm analyzing a turn. I'm not looking for a top, and I'm definitely not waiting for a turn-retest-fail. When the price action starts decelerating, I start looking to sell.
Bull runs, especially those fueled by retail FOMO, need a lot of gas to perpetuate themselves. The last few buyers at a top are usually very lonely when you consider acceleration instead of volume. It's almost as if those buyers try to outrace everyone, and everyone suddenly stops and says, "Ok bro. You can have it!" They buy quickly, and the dump comes so quick, they don't know what happened.
When the price action slows down, I start looking for the exits. But there are small corrections all the time. How do I know the difference between a rest stop and the big turn?
2. I look for round numbers. I don't overthink this, because people in a herd don't require much thought. Every time bitcoin comes to an interval of $1000, I am looking for a possible pullback. With this run, I'm looking at $21,000 more than $20,000. I believe the BTC price will overshoot its all time high before it turns.
You have to think to yourself that the buyers at a top are not just dumb and FOMOing in blindly, they are really dumb and FOMOing in blindly. $20k is too obvious. You have to be an idiot to buy at $21k before a pullback, so this is the level I'm betting on to cause the correction.
3. I look for small orders. The dumb money will come from retail buyers. When I'm reading the tape and I see a bunch of 0.00005 BTC orders chasing a price up, then I start looking to dump.
The big turn will likely come when the huge orders that come from bigger fish are far away from the smaller orders. Institutions like Grayscale, although they bought in retail size lots, tend to form a floor that solidifies the price. Discerning institutional orders from retail orders is beyond the scope of this short article, but knowing the difference really helps. Institutions and smart money stops their cars way before the retail buyers at the top.
4. The last green candle is usually the longest. I keep an eye on the charts while I'm reading the tape. The race to the top is usually going extremely fast before the big turn. I zoom out to the 1 and 4 hour charts and usually see a huge green candle that make the others look quite small.
5. The online shills will be shilling quite hard. The fake ass shills like Elliotrades and Bitboy will be shilling the hardest right before the turn. When they give the green light and look confident, that's the time to sell.
I don't believe the shills when they say you can't call tops and bottoms. Maybe they can't. That's why they're shills. I plan on keeping my gains this bull run and buying back in at a good position for the next cycle. Let's do this.