Followers of Bitcoin awoke this morning (GMT) to a shock; Not only did the price of BTC breach the $5000 dollar mark for the first time but it subsequently dropped to $4,600 in a matter of hours marking the end of two weeks growth.
BTC price briefly reached $5000 USD then immediately dropped to $4600. Coindesk
BTC price trends can be predicted to an extent using long standing trading knowledge and technical indicators like Fibonacci levels, Oscillators, and price and volume indicators
I have been trading in Bitcoin for a while now and have become accustomed to its almost lifelike respiratory cycle of peaks and troughs. So when I woke up to see it had hit $5,000 I immediately panicked, why? Because I knew from past experience that straight after this it would nosedive.
This past experience was of a similar correction around three months ago after a major bull run. History is certainly repeating itself this weekend. Moreover, one cannot legitimately expect a US$5,000 price point without some people purposefully triggering sell orders. There are also some speculators who opened a short position at this particular price point for obvious reasons.
My biggest regret about the correction three months ago is that I didn’t open up a short position at $3k and re-invest at $2k. I could have made a lot of money yet I just sat back and watched the whole thing naively hoping the price would go up. (pre-segwit bullishness) Therefore when the price hit $5k this Saturday morning I took the position of a bear; believing the price poised to drop significantly.
By time I got my act together BTC had already dropped to $4,740. I sold at this price expecting a rapid drop to $3k but was surprised to see the price stabilizing between $4,6 and $4,800. My bearish sentiments waned and I panicked thinking the Bitcoin train was leaving without me. I bought back my BTC at $4,660 just breaking even. Shortly after that the price dropped to $4,520.
To reflect I sold too late and bought back to early. To be a bear you need to strike quickly and strongly, be brave and hold your nerve. As a result of my poor performance I made no profit and spent most of Saturday morning lamenting a live BTC feed.
Still I learned from my experiences and the the next bear trap I will be ready for.