BTC - Support Holds - Uncomfortable Short Shoes - 6550 is Key
Short traders continue to pile on to a crowded trade at an important support level. Even though they continue to flow into the stadium like a Led Zepplin concert, it is only time before someone pulls the fire alarm. When piling into a crowded stadium it is a good idea to know where the exits are and stay close!
Even with short interest up more than 100% since August 1st and moreover almost 40% in the past 36 hours Bitcoin is showing resilience. The key level is simply 6550. If we were to put on our "short shoes" right now, they would feel a little tight. Especially if they are fresh out of the box. This is the short version of our recent article on S.C.
So is the pain over for bulls?
The nice thing about being long is your pain tolerance is much higher than shorts. Unless you are leveraged long, you can simply wait out the downside of markets. Shorts however, are literally on borrowed time. Eventually whether right or wrong they must buy the shares back, and in these markets if there is a liquidation on an exchange, the exchange can increase margin requirements at any given time. In other words you are at the exchanges mercy period!
We mentioned two days ago that 6550 was a key level for both bulls and bears. This level and the area around it is the likely area for shorts to place stops. There was a long trigger that was stopped out followed by a short trigger that is still active and now a long trigger that is active. Could be a battle of the bots. To be fair 5850 is the opposing key level for bulls. So where do we go from here?
I have changed my position slightly due to the formation of the current 5 wave leg, and am looking for a broader wave 2. I know several commented on my count, but I do not show everything every chart. Not only this it was premature. As I mentioned on S.C. the structure is in place for a broader ABCDE corrective structure. So we could test a lower low before the bull rally continues.
I am not calling for 4500 3000 or anything like that, much more subtle based on the longer term chart structure as I published a couple days ago on S.C. But this does not imply we can not fall apart here or subsequently rally to 9k. We are focused on the nearest support and resistance levels and looking for evidence one way or the other once we get there. If you are just calling for 4800 or 10k your simply guessing. This market continues to consolidate and only the market knows for sure the next move!
Bottom line:
Even if I was a Bear I would be covering not adding to my short position. The risk is in a short squeeze, and whenever the herd is piled into a trade, and has the potential to get REKT I will take the contrarian trade every time as I mentioned in my article on S.C. last night.
If your short make sure you are very close to the exit if and when someone pulls the fire alarm. It will likely be a blood bath if the bulls can push through 6550!!! Downside for the bulls? Ok 5850 but this is where shorts will likely start covering so how much downside risk is left? Even if it gets to 5k the shorts must buy back somewhere.
Risk is being short here, but in the end this is just my humble opinion and every trader should decide for themselves!
Even with short interest up more than 100% since August 1st and moreover almost 40% in the past 36 hours Bitcoin is showing resilience. The key level is simply 6550. If we were to put on our "short shoes" right now, they would feel a little tight. Especially if they are fresh out of the box. This is the short version of our recent article on S.C.
So is the pain over for bulls?
The nice thing about being long is your pain tolerance is much higher than shorts. Unless you are leveraged long, you can simply wait out the downside of markets. Shorts however, are literally on borrowed time. Eventually whether right or wrong they must buy the shares back, and in these markets if there is a liquidation on an exchange, the exchange can increase margin requirements at any given time. In other words you are at the exchanges mercy period!
We mentioned two days ago that 6550 was a key level for both bulls and bears. This level and the area around it is the likely area for shorts to place stops. There was a long trigger that was stopped out followed by a short trigger that is still active and now a long trigger that is active. Could be a battle of the bots. To be fair 5850 is the opposing key level for bulls. So where do we go from here?
I have changed my position slightly due to the formation of the current 5 wave leg, and am looking for a broader wave 2. I know several commented on my count, but I do not show everything every chart. Not only this it was premature. As I mentioned on S.C. the structure is in place for a broader ABCDE corrective structure. So we could test a lower low before the bull rally continues.
I am not calling for 4500 3000 or anything like that, much more subtle based on the longer term chart structure as I published a couple days ago on S.C. But this does not imply we can not fall apart here or subsequently rally to 9k. We are focused on the nearest support and resistance levels and looking for evidence one way or the other once we get there. If you are just calling for 4800 or 10k your simply guessing. This market continues to consolidate and only the market knows for sure the next move!
Bottom line:
Even if I was a Bear I would be covering not adding to my short position. The risk is in a short squeeze, and whenever the herd is piled into a trade, and has the potential to get REKT I will take the contrarian trade every time as I mentioned in my article on S.C. last night.
If your short make sure you are very close to the exit if and when someone pulls the fire alarm. It will likely be a blood bath if the bulls can push through 6550!!! Downside for the bulls? Ok 5850 but this is where shorts will likely start covering so how much downside risk is left? Even if it gets to 5k the shorts must buy back somewhere.
Risk is being short here, but in the end this is just my humble opinion and every trader should decide for themselves!
Gamblers with addictions eventually lose.
Those tears are simply drops in the rain.
SHORT REKT - Why in the heck would you ever ever ever be shorting into this market at these levels. I'm sure there will be calls of "MANIPULATIONS MAN!!" yes but if you put all the pieces together the MANIPULATORS JUST GOT CRUSHED. Look at the money flow starting with futures contracts!!!