Back in main triangle. Next big move gives direction for year
So BTC is back in the major big triangle which started months ago. There is going to be heavy resistance at the upper limit, around $7800/$7900, right now. The RSI also hit record levels on a few timescales yesterday so I think there needs to be a cooling off period if bulls are going to have enough power to get higher and break above the triangle.
The most likely scenario is probably the green line where we stay in the triangle for as long as possible. This will create indecision and eventually create a much larger move as stops build up above and below.
I see a lot of people waiting for a retrace to $6800 to buy as they're expecting a retest of the inverted head and shoulders. In my opinion if this happens it will be bearish as we would have to drop out of the main triangle. So if we do I think we might follow the red line as it will be difficult to get back up above $7200.
The most likely scenario is probably the green line where we stay in the triangle for as long as possible. This will create indecision and eventually create a much larger move as stops build up above and below.
I see a lot of people waiting for a retrace to $6800 to buy as they're expecting a retest of the inverted head and shoulders. In my opinion if this happens it will be bearish as we would have to drop out of the main triangle. So if we do I think we might follow the red line as it will be difficult to get back up above $7200.
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Big picture:
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A small triangle gas formed in the last 12 hours. I would expect this to break upwards given that many who missed the first wave up will not want to miss this one. There should be some bullish momentum.
If it does drop I expect $7270 to hold. If that fails, $7150 is another major support zone.
I got in at $7270 last night. Will take profit around $7400/$7500.
If it does drop I expect $7270 to hold. If that fails, $7150 is another major support zone.
I got in at $7270 last night. Will take profit around $7400/$7500.
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Trade closed at $7440. Think we might be forming a channel.
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Ended up fairly close although I didn't want to take a chance on how far it would go.
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I don't think $7270 will hold a second time. The yellow $7330 region has to hold or we fall to around $7200. Will also not buy right away if it does drop to $7200. Better to be safe and watch the price action for at least an hour as it could fall through $7200 as well.
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There seems to be a similar sort of pattern developing. Watch out for a spike and then big drop like yesterday.
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It repeated the pattern and got sold off quickly again above $7500. Seems like there is a bit of support at $7430 now. Not sure how long this selling can continue as the bulls are persistent. Somethings has to give soon.
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That was a fairly accurate call over the last day. I think we should drop a bit more now as we broke below support and there is also a mini head and shoulders that has formed.
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So there's been a push up to kill shorts and then drop all the way back down close to the bottom of the trading zone. At this moment I think we could make another triangle and push up to around $7500 again.
However I am not going to risk that trade although the price is moving in the trading area as expected. Those who are still waiting and have some risk appetite can perhaps buy at the bottom of the triangle around $7240 to sell higher.
The reason why I won't buy for this next move is that there has been some decent selling in the last day. There is a small chance that whales are offloading whilst FOMO is keeping the price up. You can see the RSI has been dropping but the price held level often. If that is the case then a push down could happen this weekend and there will be a better price to buy at, around $6900.
However I am not going to risk that trade although the price is moving in the trading area as expected. Those who are still waiting and have some risk appetite can perhaps buy at the bottom of the triangle around $7240 to sell higher.
The reason why I won't buy for this next move is that there has been some decent selling in the last day. There is a small chance that whales are offloading whilst FOMO is keeping the price up. You can see the RSI has been dropping but the price held level often. If that is the case then a push down could happen this weekend and there will be a better price to buy at, around $6900.
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BTC is looking pretty much as good as it can right now. Seems like it will break upwards. The safest trade is to wait for it to come back down and bounce off the triangle before buying at around $7700. That is if you're not already in and to make sure it's not just a fakeout.
My plan would be to buy at $7700 and sell at $8100.
My plan would be to buy at $7700 and sell at $8100.
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I've starting to see some similarity between the action now and the previous highs. RSI on the daily is also now higher than it's been all year. We could be getting set up for a fake breakout like previously with another double-top around $8200. Whales will offload in the orange bubble whilst people buy into their walls thinking we're breaking out upwards.
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We've broken out upwards of the trend which is in line with what happened previously. We're in the green bubbles now so close to the top I think.
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This idea is still in play. We have the first green breakout candle in the green bubbles. So I expect a drop to about $7800 where the candle began and then bounce back to at least $8100. This can happen a couple times like in the past so I am aiming to trade this move twice before sitting back and watching again.
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Will make a new chart soon based on the double top. It's now in play after falling from $8500.
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Something else of interest to note. Big money has been quietly closing longs ever since we went above $7800. Over 10k BTC worth of longs have been closed. There is distribution of BTC taking place whilst many are FOMO buying.
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Wrong graph above. The long action now also matches up with the peak in the green bubble the end of April.
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I see two possibly bounce areas to buy if we keep dropping. $8040 or $7820.
I will play it safe and wait for about $7850 to buy. There is a small chance that if we drop below $8040, we won't get back up above $8140 again in the short term.
I will play it safe and wait for about $7850 to buy. There is a small chance that if we drop below $8040, we won't get back up above $8140 again in the short term.
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Seems like a triangle has formed. These things usually break upwards and we have at least three levels of support just below. So a fairly reasonable trade would be buy at $8200 and sell at $8400.
However I'm fine with sitting this one out. There is a small chance that one of the supports breaking will trigger a long squeeze down to $7800 because there should be layered long stops by now at $8k and below. Unlikely though.
However I'm fine with sitting this one out. There is a small chance that one of the supports breaking will trigger a long squeeze down to $7800 because there should be layered long stops by now at $8k and below. Unlikely though.
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We also broke upwards out of an ascending wedge recently at $8k and a correction is overdue. Just something to keep at the back of your mind.
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It touched one support. Hard to say what will happen next. I think the bottom of the triangle around $8170 currently might now be resistance. Since a correction is due I think we won't break back into the triangle unless we go sub $8000 first.
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Things are looking a bit bearish now as it's breaking through one support after another. Combined with the SEC news on ETF's I think it is safest to wait for about $7600 to go long.
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Just something to note today. Support and resistance levels are being toyed with making the short term moves difficult to predict. See those yellow bubbles in the last day. We tested support/resistance, broke it, and then a couple hours afterwards broke back into it. Normally once these levels break you'd expect the price to stay above/below for a bit longer.
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Looking at the recent action, it seems like the price wants to go down but people keep buying at the support levels. At some point we will run out of buyers at these levels if it keeps going on.
I count 5 times in the yellow region (last 2 days) where we dropped only to bounce from support. Whereas we're not pushing upwards nearly as much. A direction is going to be chosen soon and I think downwards is more likely.
I count 5 times in the yellow region (last 2 days) where we dropped only to bounce from support. Whereas we're not pushing upwards nearly as much. A direction is going to be chosen soon and I think downwards is more likely.
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Just something else to be aware of. The last few upwards moves have been greatly driven by short positions. Mainly because once a position is taken, it's guaranteed future volume as you are forced to either close at some point or be liquidated.
So (tinfoil cap on) I think that the exchanges make use of this knowledge to force trades by pushing up the price just enough to trigger stop losses once they reach a critical level. More volume equals more guaranteed hard cash earned in fees by exchanges.
Now looking at the shorts (on Bitfinex), we are at a low point. The last two times we were around this level was early March and early May. Both times we were at near the beginning of a downtrend and dropped about 30% over the next month.
So given this info, it lends to the idea that we will not go up until people start shorting heavily again. For that to happen we need to go down first. So most probable move for the next few weeks is sideways/down until shorts start building up.
So (tinfoil cap on) I think that the exchanges make use of this knowledge to force trades by pushing up the price just enough to trigger stop losses once they reach a critical level. More volume equals more guaranteed hard cash earned in fees by exchanges.
Now looking at the shorts (on Bitfinex), we are at a low point. The last two times we were around this level was early March and early May. Both times we were at near the beginning of a downtrend and dropped about 30% over the next month.
So given this info, it lends to the idea that we will not go up until people start shorting heavily again. For that to happen we need to go down first. So most probable move for the next few weeks is sideways/down until shorts start building up.
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I've gotten back in now. Think it's worth the risk at the moment. A few reasons:
- We've just made a higher low with decent volume.
- The price action is similar to the previous double top where we don't drop any lower before making the next peak and we keep making higher lows.
- There is heavy hidden bullish divergence on the RSI which is also similar to when we had the previous double top.
- We've just made a higher low with decent volume.
- The price action is similar to the previous double top where we don't drop any lower before making the next peak and we keep making higher lows.
- There is heavy hidden bullish divergence on the RSI which is also similar to when we had the previous double top.
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One more thing to note for now. The price action for the last couple hours reminds me a lot about what happened on 13/7/2018. The blue bubble below. We dropped and then there was steady buying with good volume for an hour straight. I didn't think too much of it at the time. Notice the price action before the blue bubbles are also similar (Bart moves) and we also made a higher low back then.
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Just something on this minor dip below $8k we just had. I think we're good for a move up as long as the $7900 region holds solidly. We can see this if more buyers come in again around there. Given the amount of buying that happened yesterday around $7900, I'm willing to hold for now. I've seen price action like that before and it's not usually done for a couple percent profit. So I think there might be a few dips/shakeouts in the next couple days but we ultimately should attempt a move up to $8300+.
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I got out now with a small profit. Didn't expect this much selling pressure so soon and the steady high volume buying that I saw yesterday is no longer present. So I'm not going to risk holding and will wait for a better opportunity for the next trade.
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I see the price on Bitfinex is being pushed up with an 18k BTC buy wall. Probably a group of people with big money ($140m). Not sure what their endgame is as the chance of the order being filled is little to none. So could just be manipulation as they've managed to increase the price by $100 so far by pushing the buy orders u slowly without actually buying.
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There's a massive invisible buy order on Bitfinex at $7670. People can't sell through it. I suspect it is the big 18k BTC buy wall mentioned in my previous comment above. The order was made very likely made invisible so that some of it can be filled.
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It's retesting the top of the main large triangle from my original analysis. Never expected it to get back at this pace. Nonetheless it's a decent area to go long, at least for a few percent. There should be good horizontal and diagonal support between $7400 and $7500. I've bought now for a quick flip. Aim to get out at about $7800.
We've also formed a steep wedge with this drop which should break out today to at least $7750
We've also formed a steep wedge with this drop which should break out today to at least $7750
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So it's broken out but without much volume as yet. I expect the $7580 area to hold if it comes back to retest the wedge. Also all exchanges might not be synced with the shape of the wedge, hence the weak breakout so far.
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We went down a lot lower than I though on this move. Expected support between $7500 and $7600 to be a lot stronger and solid volume/bounce to come from there. Instead we had low volume sideways movement and a bounce from $7450, much deeper in the support region. I'm still holding although I'm not too optimistic anymore about the price breaking $8000 right now.
The double top scenario is still possible but the market seems a bit weaker than previous times. Also because of the long sideways movement around $8100/$8200, instead of a quick spike up then back sown, the area and just below should now be heavy resistance and we'll need big volume to break it.
The double top scenario is still possible but the market seems a bit weaker than previous times. Also because of the long sideways movement around $8100/$8200, instead of a quick spike up then back sown, the area and just below should now be heavy resistance and we'll need big volume to break it.
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Jeez, looking back I've been making a lot of typos recently. Will try to update when not half asleep :)
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There has been a steady closing of shorts positions in the last few days. Meanwhile longs have been increasing. Seems like the market is starting to become too bullish which means conditions are going to be ripe soon for a long squeeze. If $7300 falls we might drop all the way to $6800 pretty fast.
I'm going to get out of the market soon and watch for a bit. A high number of shorts is easier to read as the price can go up more easily with a short squeeze. A low number of shorts could mean that people are have closed their shorts and are waiting with cash to buy. So it could still hold and go up from here as people buy.
I'm going to get out of the market soon and watch for a bit. A high number of shorts is easier to read as the price can go up more easily with a short squeeze. A low number of shorts could mean that people are have closed their shorts and are waiting with cash to buy. So it could still hold and go up from here as people buy.
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Just something I posted elsewhere which I thought is good insight on the big picture. Markets usually have 3 similar moves and fail on the 4th attempt. We see it everywhere, in wedges, triangles and flags. BTC has had 3 moves up from the $6k region. So it needs to stay far away from that area or I think we will have a massive collapse.
A good example is Gold back in 2012. Looks almost like the BTC chart for the last year. We've had the bull run, then 3 bounces, and now we're in one of the blue regions. Gold went back down a 4th time and in 6 years since then has never got back to that $1550 price once it fell below. Plus there was a huge drop at that level the 4th time. Thus I'm under the impression that this current move above $7k is BTC's last chance for a bull run this year. If we do start dropping at the $6k zone, I'll sit back and watch to see if it goes sub $4k/$5k before thinking about buying/holding.
A good example is Gold back in 2012. Looks almost like the BTC chart for the last year. We've had the bull run, then 3 bounces, and now we're in one of the blue regions. Gold went back down a 4th time and in 6 years since then has never got back to that $1550 price once it fell below. Plus there was a huge drop at that level the 4th time. Thus I'm under the impression that this current move above $7k is BTC's last chance for a bull run this year. If we do start dropping at the $6k zone, I'll sit back and watch to see if it goes sub $4k/$5k before thinking about buying/holding.
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I think BTC is ready for a move up now. Plenty of bulls have been shaken out and there's decent support just below. It broke out of a wedge and is now retesting it but there's also a few other supports $7300/$7400 area. The horizontal from the recent price action and the diagonal from the long term triangle in my main chart on top.
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The market seems unpredictable as ever right now. When I first made this post almost 3 weeks ago I didn't think it would be possible to break the $7700 region, hence me not thinking upwards was an option. Bulls proved much stronger than I though possible and a few resistances were broken to put the price above $8000.
Now a couple weeks later it seems like the same situation again. I expected the $7300 region to hold on this pullback, given the bullish run and optimism. Yet once again the move is much stronger than anticipated. This time it's the bears that have much more strength than I thought possible.
So right now I don't know what to think. This pullback seems too strong to be a simple correction and if we head down towards $6k, I think we'll be seeing $5k and then $3k price levels in a couple months with $3k being the new long term support like $6k was so far this year. Similar to what happened in the Gold chart a couple posts above.
There needs to be a solid move up real soon to at least the $7500 area. Shorts have been going up fast since we dropped to $7k a few hours earlier. So a squeeze combined with some real buying is the bulls last hope. Otherwise panic will set in and trying to trade this market will become real difficult. I'll be sitting it out and watching if it starts going down to $6k because we won't know where the bottom is for a while.
Now a couple weeks later it seems like the same situation again. I expected the $7300 region to hold on this pullback, given the bullish run and optimism. Yet once again the move is much stronger than anticipated. This time it's the bears that have much more strength than I thought possible.
So right now I don't know what to think. This pullback seems too strong to be a simple correction and if we head down towards $6k, I think we'll be seeing $5k and then $3k price levels in a couple months with $3k being the new long term support like $6k was so far this year. Similar to what happened in the Gold chart a couple posts above.
There needs to be a solid move up real soon to at least the $7500 area. Shorts have been going up fast since we dropped to $7k a few hours earlier. So a squeeze combined with some real buying is the bulls last hope. Otherwise panic will set in and trying to trade this market will become real difficult. I'll be sitting it out and watching if it starts going down to $6k because we won't know where the bottom is for a while.
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The red is what I think will happen if we go to $6k again.
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Shorts have increased significantly ever since we dropped to $7k a couple days ago. About 5k BTC worth of short contracts have been opened on Bitfinex. It means there are going to be stop losses around the $7300 area. So if we can get closer to that area we should see a squeeze upwards which might be enough to get to $7800.
That's the last hope I think for a BTC recovery this year. If $6800 falls I think it's only a matter of time before we go to $6k and below.
That's the last hope I think for a BTC recovery this year. If $6800 falls I think it's only a matter of time before we go to $6k and below.
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A better view of the shorts vs BTC price since we hit $7k.
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If we go back down, there should be more support now at $6900. With this move above $7k, people who haven't closed their shorts at the low are now going to start panicking and closing as soon as it dips.
Shorts are still high from people who shorted at $7050 and below so there's a lot of power left for a squeeze.
Shorts are still high from people who shorted at $7050 and below so there's a lot of power left for a squeeze.
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My thoughts right now is that something like the green path below is possible. Breaking above $7300/$7400 will be tough but this market has surprised me before. I didn't think that breaking above the yellow region or breaking below the blue region was possible but both moves up and down were stronger than anticipated.
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Not sure what's happening at the moment. Surely a delay in the SEC news about ETF can't solely be the reason for another big drop. I expected there to be solid support in the yellow regions below. Both held for a few days before eventually breaking. It's also the first time since March that I've been caught holding with a drop this large. (Bought at $7500)
Hard to tell how far the price can recover from this drop in the short term. I'll be looking to get out asap to mitigate losses. Same as everyone else which will make it difficult for the price to recover quickly. $6800 area should now be heavy resistance as well as the $7300 area. Shorts are still going up though instead of being closed with profit. It's an indication of people being too greedy so there's a chance of a short squeeze. Longs were squeezed last night.
Hard to tell how far the price can recover from this drop in the short term. I'll be looking to get out asap to mitigate losses. Same as everyone else which will make it difficult for the price to recover quickly. $6800 area should now be heavy resistance as well as the $7300 area. Shorts are still going up though instead of being closed with profit. It's an indication of people being too greedy so there's a chance of a short squeeze. Longs were squeezed last night.
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I've noticed that a descending broadening wedge pattern has formed which has a fairly high success rate of over 70% breakout to the upside. So there is still hope for holders. The target is $7670 which seems a bit optimistic but some research shows that it is possible.
More info on the pattern:
www.tradermentality....roadening-wedge.html
More info on the pattern:
www.tradermentality....roadening-wedge.html
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This pattern is no longer valid as we've broken below the support. I've also cashed out as we're now too close to that key $6k level which will be a magnet. We might bounce around up to $6400 but it's high risk holding now as this could be the beginning of a much bigger slide. Will watch for a possible bounce with a wedge/triangle setup, otherwise will look to get back in just above $5k.
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This is what I think is likely right now. There is still serious selling pressure and the price can't get away from the key $6k level. The only reason to believe the price will go up now is the high number of shorts. If that does happen I think it would just be a quick squeeze up and then a larger drop will follow because big money is not going to be buying at these levels anymore.
We could also just keep dropping and not have the short squeeze because there are a lot more people holding and wanting to get out before a collapse vs shorters. It would be the first time in a long time that shorters in general win but it can happen.
Shorts are up around 10k BTC ever since we dropped to the $7k region and below. So all those people will be looking to buy and close their positions before then.
We could also just keep dropping and not have the short squeeze because there are a lot more people holding and wanting to get out before a collapse vs shorters. It would be the first time in a long time that shorters in general win but it can happen.
Shorts are up around 10k BTC ever since we dropped to the $7k region and below. So all those people will be looking to buy and close their positions before then.
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So I've been reading up on other stocks/markets which increased rapidly and fell afterwards. Gold was one of them as mentioned previously above:
The Nikkei also had a scarily similar structure:
The Nikkei also had a scarily similar structure:
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Looks like another dump is imminent. This time to $6k and possibly below. Head and shoulders has formed over the last two days and it's testing the support level right now.
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Started dumping as I posted. Target is around $5900.
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The drop came swiftly and it's now making a bear flag so we could see cub $6k soon.
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Something to note about these random spikes up over the last few hours. It's people closing shorts and not people buying to hold. You can see on the chart that some have started to take profit here.
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The price action before this last move up to $6400 looks very similar to what happened at the end of June. I actually saw it but didn't buy because we had made a lower low. So I thought we would go up to $6300 max before falling again.
Overall I'm still bearish and will wait for lower prices to trade. I think any move up will be short-lived and $6900 is going to be nearly impossible to breach. If somehow it does break then $7300 is the next major resistance from where we should fall hard.
Overall I'm still bearish and will wait for lower prices to trade. I think any move up will be short-lived and $6900 is going to be nearly impossible to breach. If somehow it does break then $7300 is the next major resistance from where we should fall hard.
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I think a drop to $5900 is coming soon. There's not much room for another upswing right now. Chances are that this breaks downwards.
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So t he price dropped but the lower levels just below $6200 held. Seems like there is an upwards push in progress as well as some bullish signs. If we can break $6600 then there should be a squeeze up.
The descending expanding wedge I mentioned a 5 days ago is still in play. (blue line)
There is also an inverted head and shoulders (yellow line)
The descending expanding wedge I mentioned a 5 days ago is still in play. (blue line)
There is also an inverted head and shoulders (yellow line)
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So we've had another two dumps. It might seem like doom and gloom if you're holding and at a loss. However something to note is the shorts which have increased at a faster rate than in March/April. So a short squeeze is imminent and could happen any day now. Each move down just increases the number of short positions so the market is being set up for a big move.