Yesterday I added to my short position after the hanging man candle on the 4 hour combined with the bearish crossover on the 12 and 26 period EMA’s on the hourly. I have been expecting the breakdown of $5,900 support since last Saturday and am viewing this current bounce as the final short squeeze before the sell off.
The amount of shorts has fallen significantly over the past 5 days. I would expect to see a rise in price to reflect the short sellers covering their positions and/or getting liquidated, however that has not been the case. Bitcoin has remained stagnant while the shorts have been getting rekt. I am viewing this as a bearish divergence.
I am expecting the shorts to continue to decrease down to 22,765 which is where I have drawn the white horizontal line to illustrate support. That could happen in the next few hours or days. From there I am expecting a sharp reversal in short sellers and another drawdown in Bitcoin.
The previous 4 hour candle closed in the shape of a hammer or a hanging man. It is very hard for me to decipher this one. Hanging men come after a rally in the price and a hammer must follow a sell off.
This candle followed a very small rally and that is why some would view it as a hanging man. Prior to the small bounce was a significant sell off and it could be argued that this is a hammer. Which one do you think it is?
The 15 minute chart is painting a pretty clear picture of support turning into resistance.
The bulls are fighting hard to keep the price above $5,900 however they seem to be losing the fight slowly but surely.
The number of traders that are still bullish on Twitter and Reddit is the primary reason why I am certain that we are yet to find a bottom. The profit target for my short remains at $4,950. That is due to trendlines and previous support/resistance. One last thing to note is how well that lines up with the 0.382 FIB Retracement level which is showing up at $4,976.
The stop loss remains $6,876 and that is due to the most recent Bill Williams Fractal on the daily chart.
If you are not in a position then you can start to build a short at the current levels and plan to max out your position upon a breakdown of $5,900. If you have the ability to short alts vs BTC or USD then that should be the safest bet. I am currently short BTC:USD | ETH:USD | ETH:BTC and I sold my spot positions in EOS and LTC.
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The amount of shorts has fallen significantly over the past 5 days. I would expect to see a rise in price to reflect the short sellers covering their positions and/or getting liquidated, however that has not been the case. Bitcoin has remained stagnant while the shorts have been getting rekt. I am viewing this as a bearish divergence.
I am expecting the shorts to continue to decrease down to 22,765 which is where I have drawn the white horizontal line to illustrate support. That could happen in the next few hours or days. From there I am expecting a sharp reversal in short sellers and another drawdown in Bitcoin.
The previous 4 hour candle closed in the shape of a hammer or a hanging man. It is very hard for me to decipher this one. Hanging men come after a rally in the price and a hammer must follow a sell off.
This candle followed a very small rally and that is why some would view it as a hanging man. Prior to the small bounce was a significant sell off and it could be argued that this is a hammer. Which one do you think it is?
The 15 minute chart is painting a pretty clear picture of support turning into resistance.
The bulls are fighting hard to keep the price above $5,900 however they seem to be losing the fight slowly but surely.
The number of traders that are still bullish on Twitter and Reddit is the primary reason why I am certain that we are yet to find a bottom. The profit target for my short remains at $4,950. That is due to trendlines and previous support/resistance. One last thing to note is how well that lines up with the 0.382 FIB Retracement level which is showing up at $4,976.
The stop loss remains $6,876 and that is due to the most recent Bill Williams Fractal on the daily chart.
If you are not in a position then you can start to build a short at the current levels and plan to max out your position upon a breakdown of $5,900. If you have the ability to short alts vs BTC or USD then that should be the safest bet. I am currently short BTC:USD | ETH:USD | ETH:BTC and I sold my spot positions in EOS and LTC.
Thank you for reading! Have something to say? Leave a comment! Smash the follow so that you don’t miss out on future updates and remember that clicking the like is good karma!
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