Bitcoin Price Diary: How Everything Went 100% Right With My $7.3K Long

Everyone was short and Bitcoin was “going to $6,000.” So how did veteran trader Scott Melker catch a 40% move up?

The sixth installment of my trade journal features one of my best Bitcoin (BTC) swing trades ever, catching much of the 40% move that caught many traders off guard. 

This was a straightforward trade for me, filling bids in an area that I was expecting to be near the potential bottom. The entire trade is immortalized in a twitter thread. After closing this trade, I opened a new one on the retrace, which is still active.


Setting up the trade

Entries: $7,390, $7,450 ($7,420 average entry)

Targets: $7,712, $8,535, $10,000

Stop loss: I set the stop loss at $7,240, below the 61.8% fib and recent swing low. This would result in a 2.4% loss on the position and a 1% portfolio loss. 

Risk / reward: Target 1 = 1.62, Target 2 = 6.19 Target 3 = 14.33

Part 1: Catching Bitcoin’s biggest pump since 2011

As discussed in my previous journal, after a significant break down from the bear flag on Oct. 23, Bitcoin price approached a buy order that I had set in June 2019. There was no rational reason for me to remove this order as doing so would be an emotional decision based on the recent drop. I filled my bids at $7,390 in the highlighted zone below. 

This also amounted to an almost perfect 61.8% retrace of the entire move from the $3,100 bottom to the $13,800 top, considered by many to be an ideal entry. 

XBT USD daily chart

XBT USD daily chart. Source: TradingView

Further, Bitcoin was flashing a bullish divergence on every time frame ranging from the 4-hour to the 3-day time frame. These divergences eventually confirmed on all time frames, shown below on the daily chart.

BTC USD daily chart

BTC USD daily chart. Source: TradingView

I doubled down on this position on Oct. 24 after price showed a clear swing failure pattern (SFP), wicking below a key swing low from months ago and closing above. 

This is viewed as a sign that liquidity has been engineered by a large party, who has likely moved priced below a certain level to sweep stop-loss orders and fill bids by enticing traders to go short. This SFP is shown below, both on the daily and 4-hour time frames.

BTC USD daily chart

BTC USD daily chart. Source: TradingView

BTC USD 4-hour chart

BTC USD 4-hour chart. Source: TradingView

How it worked out

Oct. 25th and 26th saw one of the largest daily moves in 24 hours in the history of Bitcoin, and the largest since 2011 — a 40% pump. 

All 3 of my targets were hit, which are illustrated below. The first target was just below the bottom of the previous trading range, a likely point of resistance. Considering the 40% move, this was a very early place to start taking profit, but I was comfortable locking in gains in an area where the price was likely to stall, if not reverse back down. I sold ⅓ of my position here. 

BTC USD 4-hour chart

BTC USD 4-hour chart. Source: TradingView

BTC price moved quickly through the first target, and in a matter of hours had reached the top of the range, filling my second round of asks at $8,500. This accounted for another ⅓ of my position closing.

BTC price

At this point, I did not have an exact take profit set, as I wanted to watch price action for a good spot to close the remaining ⅓ of the position Price ultimately moved above $10,000 quickly, so I moved a stop loss to just under this psychological level. It was night time where I live, so I went to sleep and woke up “stopped out” at just under $10,000. 

This trade (alongside a massive move on Tesla) accounted for a large enough gain to fulfill my profit quota for the rest of 2019. As I always say, the less I trade, the more I make. 

Part 2: Setting up my new Bitcoin trade

Entry: $8,995

Targets: $9,600, $9,809, $10,379.15, $10,943, $12,700… and some higher!

Stop loss: $8,775

Entry Idea

As chronicled in the previous trade, Bitcoin made a massive move and then began to retrace. For me, the 40% Bitcoin pump was a sign that the downside was likely over for good, and that it was time to continue looking for long entries. 

On any impulsive move, it is common to see a 50% retrace, a knee-jerk selling reaction to a massive change in market conditions. For this reason, I was eyeing the 50% retrace for an entry. 

BTC USD 4-hour chart

BTC USD 4-hour chart. Source: TradingView

Price dropped to the 50% level, filling my bids for a new Bitcoin position. The chart below shows fresh areas of interest I highlighted for a new trade, including the swing high ($8,995) on the 4-hour chart, immediately after the move down from late September. This is why I chose to set my bids on this line. 

BTC USD 4-hour chart

BTC USD 4-hour chart. Source: TradingView

The lines drawn on the above chart account for likely short-term targets, as well as area below to use for stop losses (with a bit of room beneath for a wick). I will continue to update this trade as it continues.

The views and opinions expressed here are solely those of the (@scottmelker) and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.


If you have other interesting news about this topic or other cryptocurrency news please let us know. Don’t forget to view our useful bitcoin videos collection to learn more about Bitcoin and Blockchain. Investing in Cryptocurrencies can be very profitable but always make sure you’re keeping your coins safe. You can use the tutorial that will teach you how to make a bitcoin paper wallet that’s the simplest way to keep your Bitcoins but the safest way is by using a hardware wallet.

You’re invited to share your opinion about this news “Bitcoin Price Diary: How Everything Went 100% Right With My $7.3K Long” by adding your comment bellow. Let’s keep this discussion civilized with a non-offensive language.

Tags: crypto newscryptocurrency news


Passionate about Crypto-Currencies and Bitcoin enthusiast. Oliver is an Editor on Crypto Cool News.

Add Your Comment