Bitcoin Trips and Falls

It looks like the whales have pounced on the opportunity to go deep sea fishing for stop losses that are generating gobs of Bitcoin to gobble up at discount prices. If you haven't heard about how whales stop-loss hunt, it goes roughly like this:

See Buy Side Order book and it's depth. Find psychological numbers (typically round numbers like $9500, $8500, $8000) to target with Bitcoin funds they're presently holding.
Fill buy orders down to that level and see what shows up on Sell side order books.
Repeat, going deeper (and cheaper) until enough stop-losses triggered to fill up the sell order side.
Buy up the Sell order book

The end result of the hunt, the whales end up up buying back original Bitcoins that they liquidated at discount as well as additional coins that they had funds on hand to boost their positions.

Remember, every sell that happens had a buyer buying. The only ones buying aggressively during a sharp down turn are those standing orders on the order books. What was once posted as hopeful discounts quickly find themselves upside down on the trades when the hunts trigger. However, assuming the whales eventually buy back at step 4, if those recently in a new position find themselves owning Bitcoin, they simply have to wait for the buy-back events to bring the prices back up as the sell supplies get depleted on the order books.

So what are the non-whales to do? Well, learn to spot the whale stop-loss hunting expeditions...notice when everyone charting one specific number to watch as resistance or support. Watch for tell-tale downturns that turn into bear flags or heads and shoulder formations. Look for confirmations (breakouts) on those patterns and be ready to buy in or step out of your position as the patterns dictate.

Sometimes you may be wrong. Have a target in mind, say 2% loss, and reverse your position as soon as you reach that point. The best traders are right perhaps six out of ten times. It's the six trades they're right that more than covers the four they were wrong on. So learning to cut losses quickly and letting winners ride. That's the key to winning. Too many simply ride the losses for far too long saying to themselves, "It'll turn any minute now." That is a recipe for disaster to which I can personally attest I have lived through time and again before I finally just automated the 2% stop losses to stop myself cheating and staying in losing positions far too long.

Building a chart like I publish here and watching for key support and resistance zones makes it all the more easier to find those patterns and make educated guesses what's coming next. With Bitcoin breaking through the top of the massive downtrend channel and MACD in widening bearish formation and below zero, we're solidly chasing the next support, which is the blue line below our current price action (seen in the top chart above).