Here on BTC , we can see that we had a break below the "heavy resistance" level (at the 50% retrace) then BTC formed a series of bear flags, inside of a symmetrical triangle, and then miraculously broke to the upside of the triangle. We can see now, that BTC has turned lower and is testing the 50 (in orange) for support, after breaking above it on the symmetrical triangle breakout. Whether or not the 50 holds as support, will be a critical indicator to watch going forward. I've drawn a pink on the BTC chart, to show you that we are still in a bear market correction. Make no mistake, until we break the top side of this pink , the bears will remain in control.
If you'll notice, there is a dotted center line, in the middle of the channel. I noticed that there seems to be a pattern, in the way that BTC has acted, after the center line of the channel is surpassed. At the beginning (left side) of the channel, you can see that when BTC broke above the center line, it hit the top of the channel. After that, it broke below the center line, then rallied back above it later, but failed to stay above. A little later, we can see that it rallied back above, and then reached the top of the channel again. Then, BTC fell back below the center line, and then failed to stay above it again. Now, we have just broken back above. So, is the pattern Top, fail, top, fail, top? It could be. As a professional trader, I look for obscure patterns and technical nuances that give me an edge on the market. This is a good example of a pattern that COULD repeat itself. To know for sure, we need to see how BTC behaves here at the 50 . Remember, baby steps people. If BTC fails to hold the 50 , and especially if it drops back below the center line of the channel, then obviously, the pattern is not repetitive. However, if we see a hold at the 50, and BTC turns back to the upside, after establishing the 50 as new support, then it would certainly increase the probability that the pattern will come to fruition.
Looking at the , we can see that there has been a small , as momentum made higher highs, while price made lower lows. It is a small addition to a slight, tiny little hint of bullishness. Don't, don't, DON'T FORGET, that we are in a huge . Until BTC gets above it, it will remain in a technical bear market correction. If the center line is broken, the repetitive pattern would be nullified. Each low made in the triangle could then act as support, with a larger at the 78.6% retrace, and then the target and the bottom of the channel. If we hold the 50 , the 200 (in purple,) the heavy resistance, and then the top of the channel, will be in play.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-MPC loves you-
Here's the thing. Modern financial systems with fractional reserves essentially have nothing in the bank and rely entirely on central banks to balance out their need for cash on demand. Tether was audited to have $442 M previously in Sept (? not sure this is right) so we know they have a lot of cash and not just nothing. The question is whether or not they have EXACTLY what they are supposed to have and whether or not they've manipulated crypto prices by using their own Tethers in the open market. Given that only $2 B in USDT supposedly exists this amount is unlikely to have much of an impact on a ~$400 B market. What I don't really understand is how transparent Tether volume is overall, and this could be the crux here as Bitfinex could in theory have done a kind of "quantitative easing" where they bought a bunch of crypto to drive prices up and then sold back to USDT to make a profit. But in this scenario they can't exit their USDT and would need to buy back into crypto at a lower price in order to gain more crypto. Given that they just injected a bunch of liquidity into the market they can't exactly reverse the price action by printing more USDT. So the logic here doesn't seem to favor the belief that they benefited by printing a bunch of USDT because 1) they would have to sell them to other exchanges for real dollars and an exchange buying Tethers will want a solid counterparty to feel confident holding those Tethers. 2) Injecting more liquidity into the market doesn't really benefit them in a short-term trade as they can't reverse the price action by adding more Tethers to buy back crypto at lower prices.
The reality is that if 1) they have zero dollars to back their Tethers and there is a 100% run on Tethers (i.e. everyone wants out of Tethers) then it still won't make much of a difference. Bitfinex and whatever other entities backing Tether are rolling in cash and crypto holdings and have equity valuations in multiples of billions USD equivalent. It's highly unlikely they don't have at the very least an equivalent amount of assets to make Tether whole should the entire thing collapse. If they didn't back it up then they would self-destruct their business which would be pointless.
The second part is that if there is a "run" on Tether people aren't going to fiat. They are likely having to buy crypto and then sell to fiat through a local or OTC exchange or moving it to another exchange. If this happens a short term spike in crypto prices will likely create enough momentum that there won't be much of an effect if any on crypto prices overall as you can't exactly unload from Tethers to say Bitcoin and then back to USD in a quick manner. It will be illiquid and highly unlikely to influence crypto prices unless the news triggers adverse market behavior. And with crypto traders being fairly twitchy you never really know how this will play out but given all of the huge bounce backs from Parity hack, Coincheck hack, Nicehash hack, etc. it seems unlikely that some bad news for Tether plays out as anything more than a buying opportunity.
In reality, it's more like water and flows with no prediction. So what we, "simple traders", could only do is try catch the water movement.
This is why I am trying to create a hole new way of trading called : "The Moving Water". So far is working pretty well, but I am trying to improve it as I speak.
Bottom line, we could have a bull trap, but even if it happens, would not go so far, there is no power for that:
- it is China's new year, and people from that part are taking there investments out to pay January bills, and a lot of USA results are coming out (fundamental);
- Big correction is about to happen, as the MA 1000 is squeezed down (3h chart), and price is about to loose MA100 (daily chart).
well talk is cheap so:
What is the tool you use to calculat the risk/reward ratio? Is it done automatically?