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 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.