Bitcoin continues in its consolidation to no where. Key support is between 29,500 and 28,000. Key resistance 31k. As far as swing trades go, there is NOTHING to do here except WAIT for a relevant test and confirmation within the key support area (see blue rectangle). Maybe that test presents itself this week, maybe not. Most importantly, do NOT waste your time and attention with seasonally uneventful markets. Here are some suggestions and things to consider for times like this.
Volume is SEASONAL. That means it generally follows the yearly calendar. Why? Very LARGE groups of PEOPLE follow the yearly calendar in a similar way. This is not an exact science, BUT during the summer months in the countries with the most advanced economies, schools close and what do people do in large numbers? Go on vacation. This trend PEAKS in August typically. Not every summer is the same in terms of magnitude (some may be busier than others in terms of market action) but the general idea is the same. I remember this type of price action as far back as the early 2000s.
As a trader, ESPECIALLY day trader, operating during PEAK volume times is important. And I am NOT referring to using a volume histogram which is generally useless. Peak volume can typically be estimated by time. Time of day, time of month, time of year, etc.
Low volume environments mean: LACK of follow through, slow grind markets, tight ranges, loose correlations, etc. This is NOT a time to be aggressive. Also ANYONE that uses overly dramatic language during these times either expose their extreme lack of experience OR are just looking to attract attention and convert it to their local currency (MOST frauds do this) or BOTH. People who use words like “pumping” in their titles or analysis are perfect examples. The probabilities (something you can’t see) do NOT favor any SIGNIFICANT movements in the current environment. While anything CAN happen, the chances are LOW. That alone is what should SHAPE your expectations and help you to better utilize your attention during these slow environments.
So here is what I suggest: if you want to trade, BE EXTREMELY selective. There should be no fear of missing out because there is NOTHING to miss and it is going to get even SLOWER next month (my trade scanner is good at being selective because it WAITS for specific criteria). Also paper trade. Sure it has its limitations, but there is nothing wrong with practicing to observe the robustness of a strategy (or lack thereof).
Spend LESS time in front of charts, take time off, especially NEXT month. This is a time to review your strategy, to develop long term investment plans, etc. Familiarize yourself with concepts like efficient markets, how interest rates shape the business cycle and how that affects particular asset classes (sector rotation).
What? You’re only interested in pressing buttons and making money? If that’s you, then the only purpose you will ever serve in this business is as a potential source of profit for those who are passionate about the business, not the money.
Thank you for considering my analysis and perspective.
