BTC/USD, 1D, update
The unexpected happened: Bitcoin's spill to the downside caught most traders in long positions, thus providing enormous liquidity across the board. Bitmex is a mere example with a $200 million wipeout in less than one hour. Aggressive moves like this prove to us how crowded positions can be lethal sometimes: the liquidation (or the stop-loss) of one long is executed by the platform in the form of a market-sell; market-sells are carried-out against the order book, so: price going down => liquidation of a long => price going even lower. This is what happened last Thursday when BTC/USD suffered a 20% drop in just one hour.
Getting back to our chart: the vertical gray line marks the day of our last commentary; at that time we would have expected the price to slowly grind to the upside to give the ex-pivotal level a retest: $10,830. It did not happen so. Instead, Bitcoin began a slow grind to the downside - as indicated by the gray arrow - a move that ended pretty bad for buyers: after $9640 failed to provide support, the price accelerated towards the $9100 red horizontal line. This is probably the level that had a lot of stop-losses, judging by the fact that lows almost equal were created here back in July (two green arrows illustrate this fact). Anyway: BTC spilled right through it, giving one of the newly-added levels a couple of successful tests: $7930.
Ok, so what could happen next?
Well... there really are two possibilities right now: price either forms a new range and continues its consolidation - scenario that could also provide a retest of the sub $7500 area OR it shoots straight up from here - marking another "Head Fake" - price behavior that's meant to squeeze longs and trap shorts. The latter seems improbable right now but if BTC/USD enjoys a big green candle through the $9000 level - we have our answer.
The unexpected happened: Bitcoin's spill to the downside caught most traders in long positions, thus providing enormous liquidity across the board. Bitmex is a mere example with a $200 million wipeout in less than one hour. Aggressive moves like this prove to us how crowded positions can be lethal sometimes: the liquidation (or the stop-loss) of one long is executed by the platform in the form of a market-sell; market-sells are carried-out against the order book, so: price going down => liquidation of a long => price going even lower. This is what happened last Thursday when BTC/USD suffered a 20% drop in just one hour.
Getting back to our chart: the vertical gray line marks the day of our last commentary; at that time we would have expected the price to slowly grind to the upside to give the ex-pivotal level a retest: $10,830. It did not happen so. Instead, Bitcoin began a slow grind to the downside - as indicated by the gray arrow - a move that ended pretty bad for buyers: after $9640 failed to provide support, the price accelerated towards the $9100 red horizontal line. This is probably the level that had a lot of stop-losses, judging by the fact that lows almost equal were created here back in July (two green arrows illustrate this fact). Anyway: BTC spilled right through it, giving one of the newly-added levels a couple of successful tests: $7930.
Ok, so what could happen next?
Well... there really are two possibilities right now: price either forms a new range and continues its consolidation - scenario that could also provide a retest of the sub $7500 area OR it shoots straight up from here - marking another "Head Fake" - price behavior that's meant to squeeze longs and trap shorts. The latter seems improbable right now but if BTC/USD enjoys a big green candle through the $9000 level - we have our answer.