Alright so this market is heating up something fierce. I watched as volume shot through the roof as the price crashed, losing all the gains we made from the last flag up. I watched as the gap between buyers and sellers was spiking up to $50-$100. For me, this signals an extremely significant chance that the top has blown off this volcano.
How should I trade this?
Simple, if you're not worried about tax events (it is January, after all) then sell a bunch of Bitcoin into stable-coins and see what happens over the next 24-48 hours. This market has been put to the test for three months, and the strong-handed investors who have been propping up the market might finally realize that the market is bubbled and not worth buying for a while.
The chance of there being another spike up within the next couple days is pretty slim. Usually (especially now) the market flags up and then waits a week to see what happens before committing to another pump up... Well we just had that pump within 24 hours, so I wouldn't expect another possible flag up for at least 5 or 6 days (unless this current run isn't over yet). This is especially true after the insane volatility and dumping we just got.
I'm basically going to do what I did before... sell at all time highs or near it, hope the market crashes, but if it doesn't... simply buy back in with stop-losses or when market volatility lowers 3 or 4 days later.
For example
We can easily sell here at $32,225 with a stop-loss to buy back in at $33,500. If we lose that bet, we only miss out on a 3.9% gain. However, if we win the bet, we could earn as much as 20% in the event of a flash crash.
Flash crash scenario
This is what happened in summer 2019, and it very well could be replaying this very second. The market peaked at $13.8k on June 26th. It flash-crashed to $12.6k, but then made a quick recovery in the same day back up to $13.3k.
Sound familiar? Because this kind of action is literally exactly what we just saw with Bitcoin. We flagged up to $33.3k, flash-crashed to $30.2k, and are now in that recovery mode back up to $32.3k. This market has become volatile and unstable, and we are on the third flag up, exactly where you would expect a peak to be, during exactly the right time.
If I'm right, there should be an epic flash crash over the next 24-48 hours. A lot of people will panic sell there, but not me... I'm going to buy and ride the dead cat bounce back up like a boss.
Conclusion
I hope I'm right... I do not recommend this trading strategy to anyone... I'm going full ham right now and I'm probably going to get wrecked... everyone loves pointing and laughing at my trading history so it's all good.
Posted Using LeoFinance Beta
Return from This Bull Run is Over: Time for Extreme Gambling to edicted's Web3 Blog
