Was Bitcoin 50k the top, or do we buy this dip?

Yesterday Bitcoin moved back above the 50,000 level for the first time since May 15th, when it fell below it dramatically!

Since July 20th, Bitcoin has rallied from 29,000 lows nearly straight up to 50,000. That is indeed the definition of a power move!

Interestingly, getting above 50,000 was simply a psychological level. We have already stealth-fully cleared the first hurdle, 46,466, which is what signaled a bullish breakout, exiting the neutral zone. 

Big round numbers, like 50,000, are always areas that sell off. These are levels that reasonable people tell themselves they will sell at, you can almost hear your father in law or front end developer friend say to you...

"I have some Bitcoin, and I'll likely sell half of it if we hit 50k"

It sounds reasonable and prudent. 

But since you subscribe to my newsletter, you likely aren't looking for what sounds reasonable and prudent, you are here to figure out what is really going on and how to take advantage of it. 

When Bitcoin closed above 46,466 that was a key level that signals the bullish breakout, and it's time to go to work!

Next up, we test that bullish breakout. 

Once a signal is in place, we need Bitcoin to jump through a couple of hoops for us, to prove to us (me) that we are indeed breaking out. 

And the next hurdle is to go above 50,518 and stay there for 12 hours straight. 

The path that Bitcoin takes to do that can be any path that it likes, it can drop in price to, I don't know 42k, reverse and power above 50,518 and hold it for 12 hours. 

Or, Bitcoin can dip to 47,500, bounce around there for a week, then on Saturday evening when no one is looking blast up above 50,518 and stay there for 12 hours.

Personally what I prefer to see is a move that sucks bears into a short position, and gets some transient bulls to sell their positions. 

So a nice reversal candle with some selling to follow through. 

We need more buyers out there to move the price up, and nothing gets people out of their Bitcoin long positions faster than a selloff at a big round number!

By breaking 50,000 these transient bulls who took profits, have a bunch of cash. They'll see a dip back below 50,000 as confirmation that they were right and spend a little less time paying attention to the price. Let's store them and their pile of cash on the sidelines.

Next up are the bears, those expecting to see a dip to 42,000 or the really frothy bears who are expecting a move back below 20,000. Realize that short sellers have to use margin to short, they are borrowing the asset, so this cohort is a lot more fragile because exchanges will automatically liquidate them. They need to stop out quickly if they are wrong. 

Let's not store them on the sidelines, let's store them with stop losses (buy to cover) slightly above the recent swing high of 50,505 (Coinbase price).

This means that most bears will have their buy stop orders at 50,510 or so. And the even more wreck-less bears will have their liquidation level as their stop loss. 

All of this is to say that there is a bunch of buy orders resting at 50,510.

When the best looking sell setup in the world, fails, we buy!

I'm not saying WHEN this will go higher, or that it is guaranteed to go higher, remember we have parameters in place to TEST Bitcoin. 

There is a >70% chance that the selloff will be bought and we spend 12 hours or more above 50,518...coincidentally this is but a few dollars above the bears most likely stops. 

So there's some extra juice resting there for us!

That means this pullback is a BUY SIGNAL, which we'll be ALL OVER in the Trading Lab. 

That also means that if (when?) we hold the time filter above 50,518, any pullback can be bought, and the next test for Bitcoin after that is 70,188. 

Who would be the first candidates to help us rock to 70k? Those transient bulls who we stored on the sidelines who'll chase this thing higher. 

Not to mention everyone else who is adding Bitcoin to their balance sheet :)

We are knee deep in this long campaign with Bitcoin, and as long as it keeps passing our tests, however it chooses to pass them, we are in it for the whole face ripping ride!

A reminder that we are increasing the price of the Trading Lab on September 1st, to $397. 

You can lock in the $297 price FOREVER by subscribing today. That means when we raise prices again next year, you'll have access at an even bigger discount!

That also means if you ever take a break and decide to come back, you are locked in at $297!

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