After the New Year's rally, the market actually reached the upper boundary of a large-scale consolidation zone. However, due to the lack of a prior trading plan, unprofitable long positions remained open, leading to profit erosion, and no short positions were opened, thus missing a trading opportunity.
The current market trend is already in a correction phase, and as shown in Figure 1, the market has entered a small-scale consolidation between 89,800 and 91,600. Let's do a quick analysis:
A consolidation zone has formed between 89,800 and 91,600, but it has already touched 89,800 multiple times, posing a risk of breaking below. Nevertheless, as long as it doesn't break below 89,000, the current trend remains intact.
As shown in Figure 2, there is a gap between 88,740 and 88,195, and gaps are generally filled, indicating a potential downside risk. Additionally, as shown in Figure 3 regarding liquidity, a large amount of liquidity is present below. Let's speculate: could the market potentially fill the gap downward in the coming days, then wipe out the underlying liquidity, followed by a significant rebound? After all, the main funds are managed by people who wouldn't want to carry such a heavy load upward, would they?
Plan:
In recent days, conduct high-low swing trading between 89800 and 91600. Break above 91600, then chase long positions; break below 89800, wait until 89000 is broken before chasing short positions.
If it breaks below, as Analysis 2 suggests, it may form a bullish pattern, indicating a return to a larger-level consolidation. In this case, consider shorting appropriately and take profit near 86700. Meanwhile, if it actually reaches 86700, start positioning a portion of spot, around 10% of total position. Then, analyze and plan further based on subsequent developments.
If 89800 is not broken, it indicates the New Year's rally is still ongoing. In this case, go long with light position near 89000, and add more after breaking above 91600.
That's all for now. Writing on the square is to deepen the mental impression of the plan through written words; at the same time, it also helps me get more familiar with the coin's behavior.
