MKR MAJOR RESISTANCE TEST?
We now see that Maker has made it's move up near the old and major resistance around 1575 area (which you can look back to on both daily or weekly chart, around january 2021 and may 2022). With such a strong resistance, and high volitality BTC, I have three possible scenarios in mind (as shown on chart):
1. MKR tests resistance, manages to break out. If this happens and MKR holds, we may see prices try to get comfortable around 1675, 1775 area, or even up to 1900 (but don't hope).
2. MKR tests resistance, fails. This means we see price go up to 1575 area or even up to 1650 area but doesn't hold it and pulls back similar to second-last candle currently on chart.
3. MKR falls weak and breaks support. As Maker is lingering above current support, it is also probable that we may see a test of support and possible breakage, which could be a lot worse than the possible bull run (up to 400 poins down, but 200 points is more likely)
How do we know which one will follow trough? We take context into account and we manage risk accordingly. MKR's movement greatly depends on BTC. Since recent BTC bullrun was mostly unexpected, hype-driven and fake-news-driven, we must take into account the weakness of that price action, and the possibility of a pullback.
If the economic environment doesn't favor, BTC can't make any major moves (like 50k run). Since economy is NOT favorable (see bonds, dollar index and S&P), BTC's potential for longs is limited. Still, momentum is momentum, and currently it looks bullish, so, anything could happen. We must see it trough and adapt accordingly.
So what do we need to place a position? A move on Bitcoin or a signal on MKR. A bullish pinbar maybe. An inside bar somewhere in the week maybe. Some news maybe. Something needs to happen to confirm one position or another, and even then, we must evaluate risk and take into account that markets are EFFICIENT, which means they are RANDOM and you cannot predict anything with 100% accuracy. You can only analyze the information the market gives and evaluate risk and positions according to it, minimizing the losses.
Thank you for reading. Hope my insight was helpful!
1. MKR tests resistance, manages to break out. If this happens and MKR holds, we may see prices try to get comfortable around 1675, 1775 area, or even up to 1900 (but don't hope).
2. MKR tests resistance, fails. This means we see price go up to 1575 area or even up to 1650 area but doesn't hold it and pulls back similar to second-last candle currently on chart.
3. MKR falls weak and breaks support. As Maker is lingering above current support, it is also probable that we may see a test of support and possible breakage, which could be a lot worse than the possible bull run (up to 400 poins down, but 200 points is more likely)
How do we know which one will follow trough? We take context into account and we manage risk accordingly. MKR's movement greatly depends on BTC. Since recent BTC bullrun was mostly unexpected, hype-driven and fake-news-driven, we must take into account the weakness of that price action, and the possibility of a pullback.
If the economic environment doesn't favor, BTC can't make any major moves (like 50k run). Since economy is NOT favorable (see bonds, dollar index and S&P), BTC's potential for longs is limited. Still, momentum is momentum, and currently it looks bullish, so, anything could happen. We must see it trough and adapt accordingly.
So what do we need to place a position? A move on Bitcoin or a signal on MKR. A bullish pinbar maybe. An inside bar somewhere in the week maybe. Some news maybe. Something needs to happen to confirm one position or another, and even then, we must evaluate risk and take into account that markets are EFFICIENT, which means they are RANDOM and you cannot predict anything with 100% accuracy. You can only analyze the information the market gives and evaluate risk and positions according to it, minimizing the losses.
Thank you for reading. Hope my insight was helpful!
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