Today will be the day that we broke below our major support : $ 6,000. As we could have expected it, there was a lot of liquidity for longs below 6k. Indeed, a lot of stop losses were triggered when we broke 6k and retail traders market sold (by panic) or to play the breakout. This is a typical move that market makers can take advantage of by pushing the price down and filling their bids below previous swing low (6k) and then push the price back up after they got filled.
You can usually spot those moves when you have a break below a previous swing low but a close above. This is called a Swing Failure Pattern and in this case it would be bullish.
If you add to it that we are forming a daily bullish divergence on the RSI (yet to be confirmed) the fakeout is really option that we can not discard yet. We don't have any divergence on volume though which is usually a great indicator to confirm a div on the RSI.
I took partial profit from my short (opened at $6,750) because this could be the perfect bear trap - at least it has all the characteristics.
I will add to my short positions if we go back to mid 6k (will update more on that).
Don't forget to hit the LIKE/FOLLOW button if you want to support my work and show your approval to what I do !
You can usually spot those moves when you have a break below a previous swing low but a close above. This is called a Swing Failure Pattern and in this case it would be bullish.
If you add to it that we are forming a daily bullish divergence on the RSI (yet to be confirmed) the fakeout is really option that we can not discard yet. We don't have any divergence on volume though which is usually a great indicator to confirm a div on the RSI.
I took partial profit from my short (opened at $6,750) because this could be the perfect bear trap - at least it has all the characteristics.
I will add to my short positions if we go back to mid 6k (will update more on that).
Don't forget to hit the LIKE/FOLLOW button if you want to support my work and show your approval to what I do !
Comment:
Well looks like it was indeed ! After a long period of - boring - consolidation looks like market makers filled their bids below 6k before pushing it up to 6.3k. We should see some more upside in the coming days
