BTC has just closed above its 300 DMA and still looks strong The major CME gap was filled in one go (not perfect fill yet, but pretty much filled). The same way we gapped down, the same way we filled the gap. Now there isn't any major untested area above that I think would act as a magnet for the price to go up, but there are some key areas above that could be tested.
On Bitfinex there was an SFP on LTFs but on other exchanges we have little double tops that will probably be broken and probably push a bit more into the gap and have a perfect fill. Open interest really dropped on the way up in BTC terms, but the basis/premiums etc haven't moved much. This rally seems to be mainly from spot buyers + a mini short squeeze without really getting many margin/futures longs. Long/Shorts still remain low while longs clearly have the upper hand so far... which means after a pullback I'd expect continuation. Could the price continue here? Absolutely, especially as the close above the 300 DMA is very tempting to long.
One trick I use is: increase the standard deviations on Bollinger bands. What this does is that when the price is above 4 standard deviations, that really is extreme and can give me a better entry or exit (it gives me a feel for how abnormal some prices might be). On FX 3 standard deviations work better. Many times I also use 120 BBs 6*4 because instead of using the Daily, I use the 4 hour and in a daily candle there are 6 4 hours candles (when applied on BTC). I do this to get a better resolution and accuracy. You can play with timeframes, deviations and lengths of BBs to get find a tool to add.
To me this rally is a product of the pre-halving rally being destroyed by Covid, a bounce from extreme capitulation back to a more 'realistic' price (based on volume profile, yearly pivot, S2F etc), but most of all QE+NIRP. Central banks are going nuts, risk assets are rallying, oil has stablized and all that definitely gave an extra boost. Normally 12 days before the halving it would had been more realistic to see the price dump. Buy the rumour, sell the news but a few days in advance when things are really priced in. Right now there are much bigger forces at play, which in my opinion are more bullish than the halving itself. The halving is a way to show that Bitcoin is hard money, which along with QE is both an incredible narrative, but it also creates a beautiful supply/demand imbalance. Bitcoin could have had any disinflationary monetary policy and it would be extremely attractive, but the current QE infinity is making me more bullish than ever.
Having said all that after such a big rally I'd rather let the market do its thing and give me either a better entry lower or a clearer entry by breaking higher. I am still trying to be as cautious as possible due to another potential leg down for the markets.
On Bitfinex there was an SFP on LTFs but on other exchanges we have little double tops that will probably be broken and probably push a bit more into the gap and have a perfect fill. Open interest really dropped on the way up in BTC terms, but the basis/premiums etc haven't moved much. This rally seems to be mainly from spot buyers + a mini short squeeze without really getting many margin/futures longs. Long/Shorts still remain low while longs clearly have the upper hand so far... which means after a pullback I'd expect continuation. Could the price continue here? Absolutely, especially as the close above the 300 DMA is very tempting to long.
One trick I use is: increase the standard deviations on Bollinger bands. What this does is that when the price is above 4 standard deviations, that really is extreme and can give me a better entry or exit (it gives me a feel for how abnormal some prices might be). On FX 3 standard deviations work better. Many times I also use 120 BBs 6*4 because instead of using the Daily, I use the 4 hour and in a daily candle there are 6 4 hours candles (when applied on BTC). I do this to get a better resolution and accuracy. You can play with timeframes, deviations and lengths of BBs to get find a tool to add.
To me this rally is a product of the pre-halving rally being destroyed by Covid, a bounce from extreme capitulation back to a more 'realistic' price (based on volume profile, yearly pivot, S2F etc), but most of all QE+NIRP. Central banks are going nuts, risk assets are rallying, oil has stablized and all that definitely gave an extra boost. Normally 12 days before the halving it would had been more realistic to see the price dump. Buy the rumour, sell the news but a few days in advance when things are really priced in. Right now there are much bigger forces at play, which in my opinion are more bullish than the halving itself. The halving is a way to show that Bitcoin is hard money, which along with QE is both an incredible narrative, but it also creates a beautiful supply/demand imbalance. Bitcoin could have had any disinflationary monetary policy and it would be extremely attractive, but the current QE infinity is making me more bullish than ever.
Having said all that after such a big rally I'd rather let the market do its thing and give me either a better entry lower or a clearer entry by breaking higher. I am still trying to be as cautious as possible due to another potential leg down for the markets.
Comment:
Waited to see the reaction near the 300DMA and by zooming in it is clear the price is still below the BBs (or at least near) so nothing really extreme yet. I think going long here with a stop below 8690 isn't a bad idea.
Comment:
The 9500 target has been hit. Forgot to mention all this in here, but have been talking about it on twitter. For now anything in the 7800-8200 zone is definitely good even for at least short term bounces.
We are still below 9500 (or maybe for more safety 9600) which for me is the last real HTF resistance on the chart that still shows that we don't have an uptrend on all timeframes.
All gaps have been filled, all untested areas have been tested (except the 11.2-11.7k which isn't that relevant), Long/Shorts have increased substantially, we've gotten a spike in rates/premiums and a destruction in alts which show bearishness.
We are still below 9500 (or maybe for more safety 9600) which for me is the last real HTF resistance on the chart that still shows that we don't have an uptrend on all timeframes.
All gaps have been filled, all untested areas have been tested (except the 11.2-11.7k which isn't that relevant), Long/Shorts have increased substantially, we've gotten a spike in rates/premiums and a destruction in alts which show bearishness.