Lesson Learned: Not respecting the overnight wick on $BTC
Been looking at the $BTC charts and realizing a pretty consistent mistake I've made, particularly around volatile overnight sessions. I've often seen a sharp wick down, let's say to 60k, then a swift recovery back above 62k by the time I'm properly at my desk. My initial reaction has often been to fade that wick, thinking it was a liquidity grab and the true market sentiment is higher, leading me to long expecting continuation. However, too many times, that 'wick' often serves as a key level that gets retested and broken in the following days, acting as a magnet. I've been burned by not respecting that initial dip as a potential crack in the structure, instead viewing it as just noise. It's a subtle difference but has significant implications for how I position, especially on shorter timeframes. Next time, I'm waiting for clear confirmation above the recovery, or respecting that initial lower wick as a valid test of support that could fail. It's a tough lesson to learn when you're looking for that bounce, but the market often gives you a cleaner entry if you just wait for the follow-through.
The 'liquidity grab' narrative can be a trap. Sometimes, a wick is just a wick and that price point was legitimately hit, even if briefly. Respecting that level, even if the price recovers quickly, can save you from trying to catch falling knives later.