As going everyone, this is Socrates with the HyperWave channel. I am here today again by myself. Tyler remains overseas in a tricky time zone and he's got very busy days scheduled while he's over there. So he's will be trying to make it, but looks like I might have to hold down the fort by myself, at least for another day or two.
So hopefully you guys don't mind, but I'm very excited today to be taking a look at Bitcoin charts as well as some smaller alts. I don't know why I said smaller, the larger cap alts is what we look at. And wow, who can believe what we have seen over the last 24 hours? This move has just been crazy.
So without any further ado, let's go ahead and jump into some charts. And the very first thing that I wanted to take a look at is this HyperWave fractal that we are seeing on the four hour chart. This is something that has been popping up over and over again on multiple different timeframes. And it's not necessarily something that Tyler is interested in trading because he is only concerned with higher timeframes, specifically the weekly chart.
But for me personally, this is something that I am very interested in myself. And for those who tuned in yesterday, you will know that I am still fully in my long position on Bitcoin because the stop loss that we set yesterday did not get triggered. So I am very happy about that and will now be using this HyperWave fractal to help me to time and exit. We've already blown through my two major targets of 10,000 and 11,000.
And now we just broke through another one at this area, which we will go over shortly. So now we're in a point where I am deep into profit that is all unrealized and I am wanting to be watching the charts like a hawk to try to time my exit as soon as I can without getting out while this thing still has some seam left in the tank. So taking a look at what we saw yesterday, I was feeling very uncomfortable about holding on to my position. I had just capitalized on a large loss on Litecoin and I was deep into the profit on Bitcoin and Ethereum more than enough to make up for the loss on Litecoin.
So I wanted to make sure that I didn't let that slip through my fingers after a big move like this. A sharp reversal can happen in the blink of an eye. If you're not ready, then that unrealized profit can disappear just as fast and that can cause a real problem, especially if you recently took a significant loss. So right here, we were consolidating or getting some reversal candles at major resistance.
We had the resistance from horizontals from these candles here and from the 50% Fibonacci retracement. So a big confluence of horizontal resistance and we were getting reversal candles and this was on also a TD Green 8 and we're also at trend resistance. So I was feeling very uncomfortable about not having capitalized on any of my profit. So what I wanted to do instead of exiting right then and there is use a very tight stop loss.
I strongly prefer tight stop losses to just getting in and out right then and there because when I am incorrect, often I can maintain my exposure and that is very much what happened here. I wanted out and I wanted out of about 50 to 75% of my position. I set a stop for 75% of my position right below this wick. Seeing a wick come off of an MA is a very strong sign to me and tells me that we should not fall back below that area if we are to continue trending upwards.
Following below that area would very much entail following below that moving average and likely rolling it over. So for a number of reasons I liked setting a stop loss here at about 11,049 when the price was at about 11,380 or so. So that's a little bit of unrealized profit but like I said, it was more than worth it to me because if this doesn't get triggered then the small amount of unrealized profit I was risking about 2.5% would be more than accounted for by I thought that move if we did break through resistance would be big and much bigger than 2.5%. So it's another area where I am calculating risk versus reward.
If this does get stopped out here, I got about 2.5% worse price than I could have here. But if it doesn't get stopped out and it goes 10% plus higher shortly thereafter then that is a 5 to 1 or better risk reward ratio and one that I very much prefer than just go ahead and exiting their app resistance is using that tight stop loss. So that did absolutely work out like a charm and now let's take a look at that next major area that I just said we broke through and that is the .618. That's a very important Fibonacci level for me and that is where I was looking for the next area of resistance after breaking through here and it seems as though we just mashed right through it had a big close up here very near the top of the candle huge move right through that area and now I would expect this to become support.
I would not want to see the price retrace back below that being that it is the 0.618 Fibonacci and it looks like it's almost exactly a 50% retracement of this bullish Marubozu or extended range candle when you get an extended range candle you do not want to see price retrace more than 50% of that or else it's an indication of a reversal that would be a dark cloud cover pattern if this does retrace more than 50% of an extended range candle that's a dark cloud cover to candlestick pattern and one that I found is awfully reliable for signaling reversals. So long story short is I would really expect this now to hold as support if we are going to continue on higher so that could be an interesting spot to set a partial stop loss. What I am interested in myself is waiting on this phase four to break down. It does seem like we just started phase four of this little hyperwave fractal and seeing this sort of vertical price action it doesn't matter whether or not you believe in hyperwave or not all you could do is just use this as a trend line and say that this is nearly a vertical trend line and if nearly a vertical trend line is violated that is a strong indication of a major reversal on the horizon.
So even though this isn't really a hyperwave because it's not on the weekly chart it doesn't matter because this is a vertical trend line and the principles of hyperwave very much apply in my mind. I think Tyler would disagree with that but for me it's the same underlying essence is there. Having accelerating trend lines following a horizontal consolidation shows a market that is extremely exuberant and only getting more exuberant as time goes on the angle of attack the angle of the trend continues to increase indicating as price goes up demand increases and exuberance increases the more price goes up. So for me this really looks like a hyperwave and it smells like a hyperwave therefore I'm going to expect it to quack like a hyperwave and be one but I don't think Tyler would necessarily agree with that because he really is not paying much mind to timeframes under the weekly.
I really do wish that we had Tyler on today because I'm very interested to hear what he is thinking. I know he was very interested in buying if we were able to convincingly break through 10 and 11, 5 I believe were his numbers that he was very interested in buying if we were able to break through that area of resistance. So I was really hoping he could be on today to explain what his thoughts are and if he did recommend any buys and if not why not. So this is a very interesting situation right here over the last 24 hours that I would really like to hear Tyler's input but unfortunately we can't always get what we want.
So we'll just have to stick with my game plan and what's looking good to me even if I think that it might be something Tyler disagrees with and you all need to just be aware of that yourself that this is coming for me and not from the man himself. So I am very intrigued by this pattern mainly because of this vertical trend line. Getting a vertical price movement like this is something that is very much an indication of the top of a parabolic move. A vertical trend line anywhere near 90 degrees is a very much an indication of a top of a parabolic move.
If a four hour candle closes below this trend line then I am probably going to be exiting like 80% of my position. I'm in huge profit right now even accounting for the Litecoin loss. My role is up about 25 to 30% right now and that's in Bitcoin. I have increased my Bitcoin position through a leverage long from this area by about 30% if I was to exit everything right now.
So that is a very appealing being up that much in a very short amount of time. Not only am I is my Bitcoin up a lot in terms of it's now worth almost twice as much as it was when I bought it but now I have potentially about 30% more if I was to fully exit my leverage longs on BTC, USD and ETH, USD after accounting for the loss that we had to take on Litecoin. That's something that is really appealing to me and I really want to be taking that profit. I mean it's sitting there staring me in the eye and I want to be taking it so this is the time where it's very fragile and very much of a balancing act where I want to let this trend continue moving as long as it's got gas in the tank and I also want to get out as soon as there is a very good indicator of a reversal.
And for me a four hour close below this trend line will be a very good indicator of a reversal. And then retracing 50% of this Maribozu, the last four hour candle would be a very significant indication of reversal and one that I may want to take 25% off the table if that were to happen. So I'm never really looking to sell right up here as we're at the local highs. Instead I'm waiting for a little development.
I'm wanting to see a more indication of a reversal before I'm getting out. Otherwise I would have gotten out like back in here. So letting it continue in my favor as long as the momentum is insane and it looks as though it has some gas left in the tank. That is the balancing act that we're trying to figure out right now and I think this four hour hyper wave fractal is the best tool for me personally in terms of I'm comfortable holding on and risking some unrealized profit as long as we continue to close above this trend line.
And as long as we do then there is more room to the upside. The bottom line is we have really made it through the large majority of the resistance. There just is not much resistance left back up in this area. You can intuitively figure that out and Tyler might be able to join.
So that would be excellent. Sending him a link real quick. So just a second. Nope.
Nope. Nope. This is going to take more than a second because I don't even have my email pulled up just yet. So I appreciate you guys being patient.
Well of course be worth your time. Like I said, this is a very interesting situation that I very much want to hear Tyler's thoughts. So I am sending him a link right now. And again, I appreciate you guys bearing with me.
That link is on the way and hopefully Tyler will be hopping on soon. Okay. Looks like I'm still screen sharing and looking at. So basically I said there's very low resistance and there's multiple reasons why you can come to that conclusion.
First of all, we've only spent one, two, three, four, five, six weeks of Bitcoin's entire history above 13,600. Only six weeks of its entire history. Therefore, there can't be much build up resistance that is confirmed by the visible range volume profile. We see that the last real major nodes were at the 8,600 area.
And when you break through the last major node, that means there's very little resistance above and you would expect significant continuation. That is exactly what happened. So that is to say that if we are able to support above that phase four line that I've drawn on the four hour chart, there's a lot of room potentially left in this move. So it is a very tricking balancing act of wanting to get my profit off the table, realize it withdraw it, but not do that before this thing makes another huge leg up.
So using trailing stop losses and moving out in bits and pieces is going to be one of the absolute best ways that I have found to do that. And let's take a look at another indicator that has worked very well for me. And that is distance from moving average. This can be found under indicators.
You go to search distance and distance from moving average by rep, half for J. That's the one I use. And then you can go edit and you can use EMA instead of SMA, which is what I prefer. So what I like to do is get a very short term EMA and see how far can the price get extended from that EMA before getting a major correction.
So let us take a look at the nine EMA on the four hour chart. And I have drawn two lines here. Generally by itself, this can be a very powerful signal. And this right here can be a cell signal when it gets to resistance.
And when it gets to support, it can be a buy signal. Let's just go ahead and take a look at how that's worked in the past. Right here, it was the top, when the top very long, but caught it right there, right here, right at the top, right here, right there at the top. So the further price gets extended from the EMA is the more likely it is to correct.
It's as plain and simple as that. And there will be limits, there will be thresholds where when it gets up to these certain thresholds, that is generally as far as it can go. So right here, we see it's at the bottom. So this would be actually a buy signal.
This is distance, it doesn't matter if it's above or below. So that's one area where you would have to look at these lines and make sure that you understand that because right here, I'm sorry, gosh, dang it, I was wrong there. And that is actually a cell signal because the price is way above. So this is when it's below, this is a zero line right here.
If it's below, it'll be down here for the buy. And if it's above, it'll be up here for the cell. So this wasn't a very good one. But you do see the price did kind of correct there after.
This was the buy signal was when it came down here. So this has been a good way to identify when moves have been exhausted as there are limitations as to how far the price can become extended from short term EMA's. And if you look back, you can kind of chart areas of support and resistance and use that as a bit of a buy or a sell signal. So what we see here is very intriguing to me.
We haven't broken out of this range. We haven't been this far above the nine EMA since right here, which was December 6, 2017 is the last time that we got this far above. So when we do break through areas of resistance, when we broke through this area, I was looking at right here to be the next stop. Since we broke through that, now I'm really looking at right here to be the next stop on this prior high.
So that is something that it can be a very good way to identify how far assets can move in a short period of time without correcting. And I'm going to send Tyler a message, make sure that he got the link. I said, I'll try to join. So you may or may not.
Okay. So this is very interesting to me. So seeing that is based on how far this price this close was from this EMA right here, way above it hasn't been that far away again since 2017. And seeing it now roll over is very important to me.
Now it looks like it's starting to return to the nine EMA that might have been it for that move. Am I hearing somebody joining? Yes. How are you doing?
I'm doing great. Sorry. I'm late. We just got back from a wonderful restaurant and tour.
Can you hear me okay? I can hear you. Great. Yep.
I'll turn up my volume a little bit. So are you able to hear me? I can hear you fine. I'm in a wonderful home office in Antwerp with a terrific client of ours.
And I was anxious to listen to what you have to say. I've watched a Bitcoin all day blow through all overhead resistance and looked like I was going to keep going and then stall out right at that 13-5 area and get it back above it, stall out again. If you don't mind, just give me a quick update of what you've been saying. Yeah, you got it.
I'll throw it back on screen share and give you the short winded version. And basically I was just looking at this hyperwave fractal on the four-hour chart. And at the end of that, it looks like this has started a phase four type of move, which is very intriguing to me in the sense that even if this isn't really a hyperwave because it's not on the weekly and yada yada yada, it's still a vertical trend line that is on a four-hour chart, it's not like on the three-minute chart or something. Going vertical on the four-hour is very intriguing to me.
And it's talking about basically closing below this on a four-hour basis would be telling me to probably go ahead and get my profit off of the table, which I'm very much wanting to do as it stands. So I'm trying to sit on my hands for as long as possible. And if we do break down this trend line, that would be as long as I want to be holding on. The other thing I'm watching out for is a 50% retrace of this candle, this extended range candle, I really do not want to see price retrace 50% of it.
And as long as it doesn't, then we will stay above the 0.618 fib. And in terms of if we're able to do that, say above that fib and above this phase line, there really is not much resistance at all. We made it through all the built-up resistance on the volume profile. And then if we just look back here, Bitcoin has only spent five weeks above 13,600 in its entire existence.
So I'm going to be up here for a couple of weeks. There just really isn't a whole lot of resistance left. So the other thing that I like using in this type of scenario is an indicator that's called a distance from moving average. So I will pull up a short-term moving average and I'll use an exponential moving average.
And then I will see how far can this price get extended from this short-term moving average without correcting it, at least returning to it. And we can use prior areas of resistance in support to indicate when this thing is really made an enormous move and therefore should be returning to the medium, at least returning to that short-term MA or EMA. So we see that right here, there was looking like we got up that level. But then when it came back to the EMA, it found support and smashed right through.
We have never been in this territory except for in December of 2017 in terms of the price being this far extended from the nine EMA on a four-hour chart has only happened one other time. So I will be paying very close attention to if this gets up to here to retest this area, then that would be an enormous cell signal for me. And it looks like it's already rolled over and is now found its kind of terminal point. So now it will be up to the nine EMA, which is tracking right along the phase four trend line.
I love seeing that if price now can return to the medium, return to the mean by retesting the nine EMA and through doing that it would also retest the baseline here. So potentially that would have to occur with more than a 50% retrace of this candle. And if that does happen, then I very much would want to see a big wick off of this area in very well time spent down retesting those areas for support. So that's pretty much what I had gone over and was very excited to hear what you've been thinking.
Well, I'm really in a quandary because the long positions we hold are embarrassingly higher than I expected them to go. And the move over $11,500 and the move over $12,000. And then this huge surge over the last 24 hours since the last broadcast just puts us up into an area where I said that if we could get up to the 13,5 level and close mainly on a weekly basis, but I'm very intrigued by the strength of this interweek that it's going to be very hard to keep it from going to all new time highs. I have made the decision not to sell the positions we have, but to buy more.
But my buy points are so far below the price action now, the possibility of getting them filled is sort of a distant memory. Now that can reverse in a heartbeat. And we can find ourselves back in the 10,000 to 11,000 area in moments. And if it comes off of extreme readings on things like it just showed us, which is not given to signal other than to say that we haven't seen these extremes going all the way back to December of 2017, that's the kind of extreme sort of reading that could lead to bigger things to the downside.
But I don't see it in Consencio. I haven't seen it in the Copic curve. I haven't seen it in the ADX. Therefore, I feel more and more like we haven't reached an extreme except on a very short time period.
If you wouldn't mind just pulling up that same chart that you had, go out to like a weekly. And what does that show you in terms of the extreme, in terms of the distance from the average? Yeah, great question. Let's take a look at the weekly.
We'll stick with the nine and it is showing a very similar situation, which is very interesting seeing this breakthrough. And then this is where it threw back to retest prior resistance versus support and did so very well. And then when that created a new high, that was a very interesting signal. So yeah, we haven't seen anything like this since, I guess, November of 2017.
And notice how this very much called the top, you want to be able to realize this at real time, because there's nothing historically to tell you that this is how far it can get away from the EMA. But it is interesting to note that price topped exactly at the farthest it had ever been from the EMA and didn't necessarily bottom. And this is just another example of why I just wasn't seeing this as a bottom or capitulation, like this is a correlation to me, this wick and this extreme from the farthest we've been from the moving average. That looks great.
This just still bothers me that it's like the first market that I've ever seen bottom without capitulation. Everybody disagrees with that. They say, oh, it decreased 90% of that not capitulation. That's not how it works.
So seeing that the extreme came right here is very interesting to me as well. And if this does get back up to here, now we do have something historically to go off. So if we do see this getting back up to this area, then that would be a big sell signal for me. Yeah, very interesting.
So my thinking now is not to be signed up here because I have no reason to sell and wish I had more. Number two is probably moving my buy points higher than they are right now, but I'm not in a rush to do that. And I'll give it another day or another couple of days or even the next weekly close to see how long it takes, if any amount of time, to absorb all of these games without any sort of a correction, which we still have not seen other than sideways corrections. We have nothing to work with on Consenio.
We have nothing to work with on sequential. We have nothing to work. Well, before I say that, would you mind throwing weekly bollinger bands on that chart? Sure, Will.
I do just want to point out that the sequential did recently give a buy signal on this to and it did break above that risk line, which tone views is very strong. It's like it's making a move now. As we're speaking, we made up half of that candle, but to the downside, that's significant. That's huge and tells me that I need a log off and go cover.
That is huge. Yeah, yeah. It would be very interesting to see. If this now wicks, so we've seen this a number of times.
You get this big candle that is a massive correction, very short, but then it finds support. This candle will be very, very, very important to see. If this wicks back up and does close above this, that would be very strong. Whereas if it continues just fully engulfing these candles before it, that will be a very strong indicator of a top.
And then look at how quickly this will look at that distance. That is spectacular to be on air while that is working. It should show everybody some very important things. We all know how volatile this can be, but it also shows how important some of these technical techniques are to first warn you about things.
And then as you watch them to actually fulfill what you were worried about, but that's true on the upside too. Sarcotius has done such an unbelievable job from this slow sevens all the way up step by step using various technical short term indicators to guide some really terrific calls in a very, very difficult market. So maybe if we just take a quick look at the weekly Bollinger, I haven't had time myself to look at it, but I will do that right now. Just wanted to show how we've got a number of these corrections and they do like to find support around this 9M.A.
Right here, this big one sold out very quick, but found support right here, support the 9M.A. That's where I move the stop right here. It's trying to find support right in that area. If it does, that would be a very intriguing spot for me to move the stop up to.
Okay. That being said, and there is one other thing. I just remembered I wanted to point out to myself and note before I forget. I'm going to get you your Bollinger Band.
This is an indicator that I have not had too much success with myself, but as I have been paying attention to how you use it, it's something that I have been interested in paying more attention to moving forward. So yeah, I think there's some interesting things here. What do you see in? Well, the big thing I see is we finally got basically a full candle above the upper Bollinger Band.
And a full candle either below the lower Bollinger Band or above the upper Bollinger Band is very often the end point. Now you see that we've done that coming up on several occasions and none of them followed through. On the one back in April, we had a break well above the upper Bollinger Band. After breaking through the middle Bollinger Band, you would expect at that point to get a retracement back to the middle Bollinger Band and then a retest of that, if it holds, you're often running to the upside again.
We didn't get close to the middle Bollinger Band before prices after four weeks of sideways activity after we first broke through with the big green candle. Two weeks later, we had that small candle that was basically the body all completely above the upper Bollinger Band in April. That should have been a signal that we needed to test either the lower Bollinger Band or the middle, but we went sideways and then started this enormous move up. We had that little doji red that the clothes and the body are all above the upper band.
Just as the previous green candle, the body itself was completely above it. What happened is a big negative reaction in the red candle down. However, it no follow through down to the middle until we go all the way back up to this week's candle that is attempting to signal something wicked this way comes so far just in the last 10 or 15 minutes by dropping all the way from the top of the wick down through the middle of the wick and now it's struggling to give us a signal which way it wants to go. There's nothing here at this point until the end of the week to tell us exactly what's going to happen.
The action I am seeing and the description that Socrates gave about some of these other indicators he's using on a 240 minute chart leads me to believe that I would prefer stepping aside of some physicians here. I'm not interested at all of buying into this and I know a lot of people disagree with that and I am going to wait to see how this four hour closes and where it is relative to other things and then I'm going to take a look. This is the weekly but I want to see where the four hour closes and then the daily closes and I might change my mind about moving the stops. I might keep the stops or my buy points my limit buys which run from 8500 down to 7500 with an average price of 8,000 I would like to buy significant amounts of Bitcoin in that range but I might have to move those up depending on how this candle closes.
Very interesting indeed so one other thing I wanted to bring up with me in a bit of a longer term chart here is monthly parabolic SAR. Great that will be interesting. I think that will be a little bit bigger so everybody can see. We just broke the monthly SAR just happened back as we broke through 10,000 or so which is a very important indicator to me.
Let's look at the last time we broke a monthly SAR to the upside. It was down around 600 bucks following the bottom and the last time we broke it to the downside was up here around 10,000 bucks so if you're just using the parabolic monthly SAR to trade Bitcoin your last entry was going to be about 682 and your eggs it was up around 10,000 or so and now your long entry is re-entered right around the 10,000 or so area. So this is a very powerful tool just in and of itself to use to identify long-term trends and as well as entries. So this is something that I find very intriguing in the sense that we just had my, I'm hoping that I'm sharing the screen I might not be.
We just had my long-term trend bullish with the weekly close above the itchy mochu cloud and what price did that happen at 10,828 and the monthly SAR gets broken at about the same time a little bit before. So right in here you had a monthly SAR break a weekly close above the cloud and you had also a green two above green one on the weekly TD sequential. So even though it had moved in a big way it just started showing long-term buy signals which all of those indicators were showing them right at the same price that Tyler was telling us that he was interested in looking at adding and below that was kind of his no-man territory. So I find it fascinating when multiple indicators are lining up on a long-term basis we also saw the monthly MACD just turn bullish.
So even though we've made a big move there are a lot of good indicators saying that this is only the start. So here we see the MACD just had the histogram term positive bullish cross here. So if you are trading long-term trends you're absolutely going to miss out on the bottom the first 15, 20%. This increased almost 300% from the bottom and it sounds weird to say that's only 15% of the move but I fully believe that.
If this really is the next bull market then this is absolutely still the first 15 to 20% of the move and if you're focused on long-term trends and always trading with the trend then you're going to have to wait for the trend to reverse and for that to happen you're going to have significant price appreciation to reverse the trend and get these long-term entry signals and that is what you have to be okay with. If you are not the type of person who's trying to catch knives or buy bottoms and sell tops you're just trying to capitalize on 80, 85% of the move then this is the action that you have to get used to missing out on and that is going to save you from the times when you thought that this was the bottom and that this was the bottom and that maybe this was that is you're going to avoid that by waiting for this to really start to put serious money at work. So I'm very intrigued by these higher time frames right now. Anything you want to add there?
No, you summed it up perfectly. I agree with everything you just said and what that means to me in general is this has now moved from an intermediate term trend into a long-term trend and I would agree that the indication is this is the beginning of the trend. This isn't halfway through, this isn't even the first 25%. This is the beginning of a trend.
Now going from 3,000 to 15,000 or let's call it 13,750 is a $10,000 move which I'm now saying has the possibility of being less than a 25% move of what is to come which would basically say that we could easily have another 30,000 on top of these prices and I think that's sort of a minimum expectation. So if it sounds like I have gone from being completely bearish, which I was for a long period of time, to conditionally bullish because one indicator of my consensus said it was time to be bullish, that to me was an intermediate term signal. But now what we are getting is a series of much longer monthly signals and an indication from things like the Bollinger Band that even though extremes had been reached, the price is ignoring those extremes and not even pulling back to the midpoint before heading higher again. I think it's very important about the stop and reverse point on a monthly basis.
If you notice in the past the length of time stop and reverse points do not whipsaw. You are either above or below the price for many, many, many, many months which is a rare thing in technical analysis. Very often you get one short period and then a flip to another short period and another. That's not the way stop and reverse works and the fact that we have now posted our first stop and reverse point below the prices of a moon from 3000 to 13,000 is very, very significant.
I would also agree with Socrates that that first green histogram we've seen in a very long time, standing on its own needs to be taken into consideration. But when added to all of the other things that Socrates has just shown us and what the Bollinger band has shown us, I think is very significant. In the days to come we will be able to be much more specific about what sort of action needs to be taken to either those that are fully in or partially in or not in at all. I think it's too early to resolve that.
As I said, I am fighting with myself in terms of exactly where buys should be put in. You don't have to put them so low if this is the beginning of a massive move that we can't get into it. I like to later purchases when I'm going from cash into some other asset class. I'm very happy with the fact that our purchases in the 68 to $6,200 level work very well in a layered fashion.
I'm just trying to figure out now if this acceleration up still has more to go and if so, it will give us better targets for where to put buys in. I never like to put new money in into a strong market. I love to put new money in to a strong market on pullbacks, which I believe is the right way to do it except for one problem. We have no pullbacks.
We haven't had any pullbacks in this on a monthly basis in a weekly basis. Even the daily pullbacks we've had are very sketchy. They're mainly sideways and not what you can consider as places where future support can be found. The last one we had was in that $8,700 to $9,000 range and nothing since that.
That's why I've picked the $8,500 to $7,500 range is a place I'd love to get in. Look at on this daily chart where the stopping reverse points are. They're all the way up already well beyond those points where the support and resistance were taking place at the $9,000 level. The only way to get down there from the levels we have now reached is to break down through that stopping reverse point.
On a daily basis you can do it. Take a look at the reversals that we've had since the bottom. It's been about eight where you go for a period of time with strong stopping reverses above and below the price, but they keep flipping. It's possible for us to drop down from current levels, take out the stopping reverse, get down to the $8,500 to $9,000 level where we might be able to make some good purchases.
It's simply too early to make that call. Notice on the bottom where you're looking at the MACDs that we are now very overextended on a daily basis compared to the previous three or four positive cycles from the low on a daily basis. This might be an area where finally we get some sort of rest and there's no reason to chase anything ever. There's always another chance coming.
You might have to pay up for it. If you're not in it at all, you could very well be forgiven for getting your feet wet at higher prices than I think are reasonable from everything that Socrates and I've just said. At some point, tone is going to be 100% correct. We just don't know from what height these major corrections will come from.
Every major move that Bitcoin has made or down has got corrections in the opposite direction that are significant. We have not had that so far. It is coming. Maybe this is the beginning of it here at the final $13,500 level, which is to me and I've been saying it for a long time, the last area that I'm worried about before we go to all new time highs over 20,000.
But that doesn't mean we can't run into some sort of a pullback before that occurs tomorrow's blog in the day after that and through the weekend on Sunday. I think it's going to be very important. I would absolutely agree. It will be very important indeed.
One thing that I can share for individuals who don't have any exposure at all and are really starting to feel anxious about getting totally left behind. I did make a recent post on TradingView titled, Some on the Lines of Advanced Dollar Cost Averaging Strategies. I talk about how I like to use a combination of dollar cost averaging and dip buying in order to mainly relieve any psychological anxiety that I feel. It's a really good way for me to sidestep the anxiety that occurs when there is no dip coming and that's what you're waiting for.
Like Tyler said, I fully agree that buying pullbacks in bull markets is the way to do it. What happens when you're waiting to buy pullbacks at $5,000 down to $42,000? It never comes and you're waiting for a pullback at $62,000. Then you're waiting for a pullback to $94,000.
It never comes. Now you can be getting really, really anxious and frustrated and feeling like you're totally getting left behind. For me, I like being extremely patient with my dip buying. If there is a dip that isn't returning to the 200 EMA and giving me a buying signal, then I'm staying away.
To help me to relieve my psychological anxiety, I am complimenting my dip buying with a dollar cost averaging strategy. Maybe 25, 30% of X that I want to enter will be set aside for dollar cost averaging such that if I totally screw up my dip buying approach, like I almost did here, anybody remembers this show I bought here and said that I didn't want to because I really thought this was going to continue down further. If I just made a couple bad decisions and I totally screwed that up, well, at least I've got the hedge of dollar cost averaging. That's something that I am a big proponent of is doing both in order to help yourself be patient for waiting on dips that seem like they are never coming.
One of the real basic things that I outlined for dollar cost averaging is doing it on a daily basis. Figure out, say that the exit you have to enter is 10,000. You're going to set aside $2,500 to dollar cost average. Then figure out at what point you want to be fully entered, say in 100 days.
In 100 days from now, I want to be fully entered with this amount that I'm dollar cost averaging. So you determine how much do I need to enter on a daily basis to make sure that it's fully entered in 100 days. That is a very powerful technique that sounds quite simple but it's a lot easier said than done. You'll notice on days like these days when the price is pulling back and you're ready to do a daily buy, you're going to be thinking, why don't I wait a little more?
It's going to keep coming. I can buy it down here and get even more Bitcoin. Just going through that process of buying on a daily basis, I recommend it opposed to keep a journal of what you're feeling, what emotions you're going through. Are you really excited to buy here?
Are you wanting to buy more? Are you wanting to buy less? Are you wanting to not buy at all? Notice what emotions you're feeling as you're inputting those orders and then use that to help you stay one step ahead of the market.
Once you can realize how your emotions have been, controlling your decision making process, then you can start to stay one step ahead of that and keeping a journal and doing daily buys is a great way to do that. Like Tyler and I said, we both believe this is very, very early on in the trend. The last one went from an all-time high of around 1100 up to 20,000. About a 20x move from the prior all-time high, there's very good reason to believe that we could get some sort of move like that.
If that is the case, then this is very much the beginning. If you're completely on the sidelines, then I would definitely recommend to consider some sort of dollar cost averaging strategy to complement a dip buying approach. One other rant that I will go on before closing off the day, I'll try to keep it as brief as possible, is just how important it is not to make any emotional decisions and not to make any knee jerk reactions. Don't let the market control your decision making process.
As this candle was coming about, it was kind of scaring me and you might have heard me say, wow, I might need to log off and go cover my positions. That was absolutely incorrect. I should never be making a decision based on something that just happened in the last 10, 15 minutes. That is absolutely not how you want to trade.
You've only got two decisions to make, your entry and your exit. If you do either one based on a motion, then you're leaving money on the table or you're going to cost yourself significantly. I think this is really important to see when something like this out of nowhere happens very unexpectedly. How do you think through it and how do you react?
You're watching all this profit that I was so excited about an hour ago. Looks like it could be disappearing right in front of my eyes. What do I do? It's very, very important to take a deep breath and have a process.
I have something that you know you can wait for. For me, it might be a four hour close. Just waiting the next three hours regardless of how far this thing can pull back. That may be what you need to do.
You have to have something in place such that when someone expects it happens, you know how to react. For me, I really like zooming in and seeing what my EMA's are looking like on a shorter time frame. This is often what will happen will be that actually this is a buying opportunity based on shorter time frames. I don't want to be freaking out and panic closing even if I am in profit.
So you notice that I'm always looking for retests of the 200 EMA on any time frame is a buy signal when the 50 is got a good divergence when there's a significant spread and the 200 is trending up. So what do we have here? We've got the 200 trending up significant divergence and price testing this 200. That's a buy signal.
And me seeing this now I'm not so worried because I know from experience how long it will take for this to roll over for this to get a death cross. And if this really was the top, if it's really going to roll over, this is going to take some time when the moving averages are this spread apart. It is very strong support. And when the price is below it, this will act as a magnet.
When the price is below a bullish moving average with significant spread, price will at least want to consolidate in between while the moving averages cross over in a bearish manner. So this is where I will be using shorter time frames to see what is happening. It fell right through on the five minute. If this gets a death cross on the five minute, now it might be time for me to start scaling out depending on what I'm seeing on the 15 or so.
The moral of the story here is that instead of just seeing this big candle and panicking and closing, it's very important to have a backup plan. Either waiting for this close or the four hour and saying if it's below this moving average and I'm out, if it's above I'm holding on, or using shorter time frames to say as long as this 15 minute is in a bullish crossover, then I want to be holding on to this position. We can see it basically has been. There was a small little peak through right in here, but it's basically been in a bullish cross ever since back below 8,000.
So that can help to identify corrections versus short term reversals. And it's a very good way for me to be able to be patient and not react to sudden developments in the market that are against my favor. I'm not just going to instantly go and make a decision to close my position. I'm going to zoom in and look for confirmation from these moving averages.
And I'm also going to look for that four hour close being above or below that nine EMA. I think this was a very important time for this show to happen because this was a lot of volatility price went from 13,800 down to 11,464. That's a huge move in the matter of less than an hour and walking through my thought process of how to work your way through this sort of situation. I think is very important because there are going to be a lot of these squeezed type of situations in Bitcoin, a lot of these major moves and short periods of time.
And it's very important that you're not the one who is panic selling at the bottom right before it has the next big move. Because I mean, the bottom line is if you're waiting to buy a dip, that was a dip. That was just going to calculate the percentage real quick and then I will be over with my rent. But that was about a 17% dip.
The price just dips 17% in an hour or two. And that is how the dips will be when the market is really moving and everybody is waiting to buy the dip. It's going to happen so fast and so sharp that everybody's going to actually want to sell it. And that's how it tends to work on the dips in major bull markets is everybody's waiting for it.
So when it happens, it happens so fast and so sharp that nobody touches it except for the ones that are very, very, very much prepared. So seeing this action right here, that was a 17% dip. And if we can now support, that could have been that basically the next dip before the next leg up. So that is the end of what I'm going to talk about.
Anything you wanted to add, Tyler? No, other than to say that it's all very great advice. And as a corollary to what you just heard in terms of dollar cost averaging as a method not to make money or to save money, but to change your psychological profile during periods of time. One other way is to adjust the size of your positions.
Some people can handle very large positions in very volatile markets and other people can't. And if you're one of those who isn't sure what to do when a big move is taking place either in your favor or against you, just consider taking a smaller position and wait for the next big move up or big down to see how you personally react to it. What you want to do under all circumstances is have a plan before things happen. To put buy points in before you get a spike down so quickly that you don't have time to buy on the dip.
You have to be there before it happens. And as prices go higher, you need to adjust those, which is what I'm considering right now doing, is considering where I want my buy points to be after the small clears from this field of battle. And we can see a little clearer what actually happened. Not only on all the technical indicators, but just on the price itself.
What does the candle actually look like? How much did it regain or not regain? You don't know that until they're very close to the candle and then the open and the body and the close of the next one. You always have time if you consider that at any moment there are at least three options.
One is the price isn't going to do anything for a while. The second is prices are going to go up more than you expect. And the third is prices are going to go down more than you expect. And in those three scenarios, at any moment in time when you're moving money, you need to know what you are going to do with each of those variations.
And take action for that before it occurs. Now you can go to sleep, everything is set up, wake up the next morning and see what happened. You already know that if one, two or three happens, what the result is. You don't have to make a snap decision based on this violent movement.
Excellent. I absolutely couldn't agree more. I do think that position sizing is probably something that we should go over a little bit more in the future and is something that is extremely important. In my opinion, maybe one of the most important factors and one of the most underutilized factors by many people is position sizing.
And just think of it like this, there's two reasons why it's important. The psychological aspect as well as the opportunity to profit. And so think about Blackjack and how it is a game where you are a dog. You're giving up an edge of one or two percent.
So you're 48, 49 percent. You're playing very well, unless you know how to adjust your bets properly. Just through changing your bet sizing, can you be able to gain an edge from Blackjack? You can turn the odds from giving up 100 percent to getting 1 percent your favorite.
All you're doing is adjusting the position sizing, adjusting the bet sizing. So earlier I did say there's two decisions. There's the buy and the sell and you can't really do either based on your motion. There's really three.
And the third is the position sizing and determining the position size is going to be the third decision that you make. And for those who are inexperienced or are trying to gain experience or trying to learn how to beat the market, I could not recommend heavily enough to start extremely small. If you've got $200 to your name, then start with $5 roll on Bitmex using limit orders where you get paid to provide liquidity. It's such a small amount that you do not care if you win or lose.
Then you can cut through all of the emotion and instantly get right down to what matters and what's important. And that's exactly what I did multiple times. When I wanted to start trading on leverage in crypto, there was a lot of reasons why I felt like I shouldn't do that. But enough good reasons why I wanted to try it out.
And I decided that I would take one 100th of my bank roll and put it into a margin account and I would never increase that exposure until I 10x that account, proving to myself that I was able to handle the emotions associated with trading crypto on margin. And I knew that if I lost that 1%, it just wouldn't affect me at all and I could do it a couple of times. And if I was unable to figure this out, then so be it. I'm going back to what I knew how to do.
So figuring out where your emotions are really affecting you is going to, in large part, be based on where you are potentially exposing too much risk, where you're betting too much or using too wide of a stop loss or too much leverage. That is nine times out of 10, what is going to cause you to make emotional decisions about your position. And if you're able to cut through those emotions and just focus on making the right decisions as opposed to making a whole bunch of money, then you can put yourself on a path to consistently beating the market. And it's my opinion that the best way to do that is by trading a non-zero sum amount of money that it's not play money, but it's money that you can absolutely lose and lose multiple times without it really saving you at all.
So I couldn't recommend that strongly enough, especially for those who feel like there's a little bit too much emotions in their trading, just decrease the position size and watch how those emotions go away. And then the real challenge will be the discipline to keep that position size down, the emotion will be telling you that you really want a bigger position here. So that is the end of my last rant for the day, so I'm sure glad that Tyler was able to join us. I'm sure glad that Bitcoin is continuing to smash right through important levels of resistance.
And I hope that you will have a great rest of your trip and be able to join us while you're out there. Terrific. I hope I can. I'm almost sure that I can.
We'll see how it all goes. But thank you very much doing a great job. I might not have to come back for a long time if you keep doing so well. But this was a very important one.
And I had no idea that the movement was going quite the way it was until dinner tonight. We were out with friends and I happened to look at where the price was. So I wanted to get back and see if I could make the blog with Socrates and hear his wisdom. So thank you very much.
And thank you everybody. All right. We will look forward to chatting with you all tomorrow. Have a great rest of your day and enjoy your time in.
Remind me where you are in Belgium. And tour. And for a couple of days I'll be headed up to Amsterdam. Excellent.
You have a good rest tonight and we'll plan on hoping to see you tomorrow. Okay. Terrific. Thanks so much.