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When you are trapped in a Bull-Flip you can lose a lot of money. This is how to avoid a Bull-Flip.
Bitcoin is having trouble to overcome the critical resistance at $ 12.000,-. Since the resistance rejected earlier this week we see a major bearish correction. On the other hand bulls still hope that the way forward is a promising major price increase.
This creates ground for a treasonable condition in the market, the bull-flip. In this post we discuss what a bull-flip is and what you can do to avoid losing cryptomoney.
What is a bull-flip?
Bull-flip is a fast bearish trend in the markets. The bull-flip, like its bear counterpart, gives the wrong impression of a market turnaround. In this case, the showdown is intentionally trying to persuade naive traders to buy a property. The price continues to fall after the capture phase and the bulls are trapped.
How to avoid a Bull-flip?
Luckily a bull-trap can be avoided. We share three steps to avoid getting bull-trapped.
1. Avoid late entries to dodge a bull-trap:
A long and lasting bullish trend is usually a possible indicator of an erroneous pattern from the description of the bullish curve. In short, the more a trend develops, the more likely it is to change. By avoiding late entries, the trader will run away from the bull. When a sample is considered “too long” for a while, it is best not to sell it. Delighted traders, buyers, and sellers discover that during crises reckless traders come and add transactions. They follow them and then try when they least expect it, reversing the patterns.
2. Wait for new tests:
There is no established law that says it is wrong to buy in areas of resistance turned into support. Traders realize that the area of resistance is damaged when it is damaged. Likewise, the resistance zone, when broken, becomes a support zone.
Simply put, a trader should always expect the price to not only cross the resistance zone but also retest and gain momentum before his orders are executed. Buying in the new test means the store is much smaller than the one placed above the broken candle. Therefore, if the exchange fails, less money will be lost.
3. Observe the price and charts to see a Bull-Trap come and go:
By observing the price action, traders can avoid bullish-flip. The action price is applied to the actual behavior of the market at a given time. Now, seeing an increase that reaches a certain degree of resistance, the trader will be happy to remember what the price is. For example:
• When the price reaches the resistance zone, shorter candles begin to form. There is currently no volume or momentum to support trade.
• If longer teddy bear candlesticks are sold, supplemented by bull candlesticks, it means that the bears are taking control of the market direction. Don’t buy a job.
• If the candles at the top of the resistance zone have long locks, it means that the bears are preventing the price from continuing to rise. If available purchase negotiations are available here, they will only benefit for a short time before they are canceled and taken.
If you want more insights about trends in the cryptocurrency market, the moving average might be a good indicator. You can learn more here.
Our conclusion about the Bull-Flip
Bull-flip trends allow traders to engage in risky trades that often result in losses. When they hear the prayer, many merchants tremble. However, they can become profitable only by knowing how much bulls work and what they mean. In this article, we saw how to identify and even trade bulls-flip while reducing risk and maximizing profits, while price action is the best way to read the market and avoid bulls when they arise.
Curious about the current price of Bitcoin and other cryptocurrencies? Take a look at our live cryptocurrency exchange rates.
If you feel it is the right time to trade, we recommend that you get to open an account at Bitvavo. Bitvavo is the cheapest broker in the Netherlands and they now offer an attractive discount (no costs charged in the first week) when you open an account. If you prefer to trade in US dollars or GBP, then we suggest Binance, one of the most important and advanced crypto exchanges in the world.