To add a little positive thought into the gloomy picture being created by the Mr Whaley the Market Maker I've overlayed a typical manipulation of a Stop Hunt (Novice Alert). In FOREX these occur by the minute, by the day but also by the month and year to Stop Out all the different traders - The house always wins. Now there are a number of large players in the market ($10m+) there is a high chance that they are applying what they know at a market level (as there is little to no pressure from the hype to impact their strategy) and so for illustration purposes I've overlayed a typical pattern to see how it matches up...
Scarily accurate isn't it..
Look, I've lifted this trend overlay from Market Trader's Daily who specialise in this stuff - this is not my guesstimate on what might happen, merely and idea of what has happened in other markets. Most experienced traders will know about this stuff and a few traders are talking about this but for any (remaining ;) newbies like me it is worth going to do some research on it.
The last time I looked at this pattern the market shifted and dropped deeper but did come back up so I'm cautious on this and consider giant stops hunts as just another indicator on planning for the bottom - Hence my Neutral position. However, once all the shorts are done I hope to see the breaking of the down trend.
Note that on my chart I've accidentally estimated the green area slightly too deep and time frames are probably too long but these are merely estimates. In this scenario, Mr Whaley will break through the line, eat his fill and go hit the shorts, then come back for a few more stops before heading up.
Novice trying to catch a whale, Expecting short term upswing - Neutral to longer term until August mark.
We are at a pivotal point where this SH trendline will either break down or go up:
- Drop to $7,824 (Binance) and then break the remaining resistance to drop further
- Drop to $7,824 and then rebound to new highs (no immediately)
Binance USDT is generally a few points lower than FIAT (I know, I should not be anywhere near Tether ;) - I'd actually suggest that the resistance is even lower - $7,720 - juggling Bitfinex data (via Tradingview), GDAX data, Binance data - you can't trade properly with that setup! :S
- Logic would say go after the HODL gang next - get them to sell then we go up.
I think it will hold for now - but would not be surprised if it breaks in this bear market.