Stay out for two reasons: 1. Global economy: It appears we are in the early stages of a dollar liquidity crisis. The Fed is pumping a 1tn steroid injection into the markets but no one gives a damn. As the Fed shows its impotence, the economy is faced with its immense dollar-denominated credit balance. Long term this will validate BTC, but for the near term, dollars, relative to credit, will be more scarce than even our beloved 21m-capped bitcoin. A deleveraging event is in motion, and holy sh** are people puking.
2. Pure technicals: We have CME gaps down at 3135 and 3565. If we fill these, momentum will be pushing heavily down, suggesting a potential break even lower.
3. Market psychology: We need the strongest of hands to hold this bottom up. Another puke session can't be ruled out to build a strong, strong foundation.
Strategy: Stay out--we have zero confirmation this dump is over. Your stop is going to get triggered in this environment.
thanks for the analysis.
im still shorting.
its the only profit ive made since feb.
btw what is CME gap?
Jonathanaustro
⋅
@Efpi, A CME gap occurs when there is a difference in price between the close on CME BTC futures going into a weekend, and the opening price coming out of a weekend. This is because CME BTC futures actually closes trading on weekends. If left unfilled, these gaps have a high tendency of filling, ie retracing.
@andreybowers, 3145 actually--updated to reflect the correction. The gap shows on all time frames. Closed at 3145 on Dec. 14, 2018, and opened higher on Dec. 17, 2018, never filling the gap.
ezpi
⋅
@andreybowers, btw what do you mean by gap at 3135?
are you saying we have to go down to 3135 to fill the CME gap you explained above?
Jonathanaustro
⋅
@Efpi, The market fills these gaps with a high probability, high enough that it warrants attention when they remain unfilled. In this case, it warrants caution at reentering the market. In this analysis I incorporate gap analysis with a broader trading thesis.