Market Recap: October 2 Performance
Yesterday's market movement followed our earlier analysis closely. The morning saw Bitcoin prices surge before retracing downward during the day. As we emphasized in previous articles, the European trading session's strength determines whether secondary highs can be breached. With prices trending downward during this critical period, new highs became increasingly unlikely - precisely why we maintained our short positions rather than pursuing long opportunities.
Our Ethereum short position at 1728 proved exceptionally profitable, reaching our 1685 take-profit zone as planned. While we initially considered long positions at 1685, the absence of clear reversal signals prompted us to retain only our short positions, securing substantial gains without unnecessary risk.
Bitcoin (BTC) Contract Technical Analysis - October 3
Daily Chart Overview
- Price Action: Yesterday's daily candle closed as a medium bullish candle, maintaining the established pattern of consecutive bullish candles with isolated bearish interruptions
- Key Observation: Despite yesterday's significant pullback, the overall trend remains bullish with prices hovering near moving averages
- Indicator Status: The MACD shows a secondary golden cross with increasing volume, suggesting continued momentum
4-Hour Chart Insights
- Critical Support: 27000 level (previous swing low) held during yesterday's retracement
- Immediate Resistance: 27750 zone (current moving average resistance on 4-hour chart)
- Price Behavior: Current consolidation suggests potential range-bound movement today
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Today's BTC Trading Strategy
| Position | Entry Zone | Stop Loss | Target Zone |
|---|---|---|---|
| Short | 27750 | 28000 | 27200 |
| Long | 27200 | 26950 | 27750-27800 |
Ethereum (ETH) Contract Technical Analysis - October 3
Daily Chart Perspective
- Candle Formation: Similar to BTC, ETH closed with a medium bullish candle yesterday
- Trend Characteristic: Maintains the pattern of consecutive bullish closes with isolated bearish interruptions
- Key Support: Previous swing low remains intact despite yesterday's pullback
4-Hour Chart Observations
- Resistance Level: 1680 (moving average resistance)
- Support Level: 1630 (recent swing low)
- Market Phase: Current sideways movement suggests consolidation before next directional move
Today's ETH Trading Strategy
| Position | Entry Zone | Stop Loss | Target Zone |
|---|---|---|---|
| Short | 1680 | 1701 | 1630-1620 |
| Long | 1620 | 1599 | 1650-1660 |
Market Psychology and Position Management
The current market demonstrates several important characteristics:
- Bullish Resilience: Despite pullbacks, neither BTC nor ETH breached critical support levels
- Range Formation: Yesterday's movement established clearer boundaries for potential range trading
- Time Sensitivity: European session remains crucial for determining daily momentum
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Frequently Asked Questions
Q: Why didn't you take long positions at the 1685 support level in ETH?
A: We require clear reversal signals (such as bullish engulfing patterns or RSI divergence) before entering counter-trend positions. The absence of these signs made the trade too speculative.
Q: How do you determine your stop loss placements?
A: Stops are placed beyond recent swing highs/lows or key psychological levels to account for normal market volatility while limiting unnecessary losses.
Q: What makes the European session so important for crypto markets?
A: The overlap between European and early North American trading creates peak liquidity periods when institutional players are most active, often setting the day's trend.
Q: Should traders adjust these strategies for different timeframes?
A: While the principles remain similar, position sizing and stop placements should be adjusted proportionally when trading different timeframes.
Q: How do you identify critical support/resistance levels?
A: We combine multiple factors including previous swing points, Fibonacci retracement levels, volume profiles, and moving average convergences.
Key Takeaways for October 3 Trading
- Both BTC and ETH show characteristics of bullish trends undergoing healthy consolidation
- Range-bound strategies may outperform trend-following approaches today
- Strict risk management remains essential given current volatility levels
- European session price action will likely determine whether ranges hold or break