May 18 Morning Thoughts

The early weakness in Bitcoin continues, with the price dropping further from yesterday's high of 78,564 down to around 76,666, and the index from around 2,197 down to 2,085. With the trend confirmed, it's a matter of space. Yesterday morning and today twice suggested doing a short around 78,500, with a maximum of nearly 2,000 points of space. The actual Bitcoin price around 78,400 and 78,100 twice set short positions, all closed for profit near 77,000. The target levels have all been reached. Although we previously emphasized the bullish trend of the altcoin, after last week's unilateral move, a sharp retracement followed by a trend-following short position is a good strategy. After a significant breakdown, a transition to consolidation is expected, as the retracement space is indeed large. Still, the idea of rebound and shorting remains unchanged.

From a technical perspective, the daily chart shows three consecutive bearish candles breaking below the middle band, further declining. After a long period of sideways consolidation and pressure over the weekend, a weak downward move emerged. As the daily chart declines, the short-term structure turns weak. The sharp retracement has basically broken this upward pattern. It’s important to note that the rebound strength and amplitude are not very large this time, meaning that from a timing perspective, there may still be further downward exploration for support. Currently, the short-term structure is in a unilateral retracement, but from the weekly and daily charts, there is still some room for adjustment below. There’s no need to worry about space when shorting; the early morning saw a small waterfall decline, driving the moving averages to turn downward and emit short-term momentum. In the short term, follow the trend and continue to watch for the trend to extend.

Operation Suggestions
Bitcoin short around 77,500–78,000, target near 76,000
Altcoin short around 2,140–2,160, target near 2,050