As I am writing this, BTC is nearing the ATH that so many of us have been anticipating. However I am unsure that the market is ready to sustain these new high levels.
Now before I go any further I want to mention that this is only a theory of mine. Based entirely on my thoughts and understanding of the current market. It is nothing but an idea, that is right nor wrong, only a possibility.
My Reasoning: I believe that over the recent days we may have been witnessing an artificial pump. Based on data I have pulled from external sources. The ALT coin market cap fell 5% on Oct 9th. That same day BTC rose 4%, while many of the top alts rapidly declined or remained completely stagnate. Now as many of us know, most exchanges do not offer direct USD pairs with altcoins. Therefore, in order for someone to sell or EXIT an Alt, they must first go through BTC. In turn this raises the price. This is why I called it an artificial pump. So time will tell whether this transfer of ~$5 Billion USD is sustainable in the market, or is actually an exit strategy.
My plan of action: IF BTC breaks the current upward trendline, I will place my first short. My 1st target is a historical support zone. This zone was not tested in this last rally up, but depending on the velocity of the drop, it may be a zone to watch out for.
IF that Zone fails, my next target would be the Marjor Upward Trendline. This trendline will likely hold a lot of support could be very difficult to break. Watch out for large bounces leading to an upward trend continuation. I believe this scenario is the most likely.
IF that trendline fails, my final target zone is set between the .236 and .382 retracement levels.
That being said, I still believe a double top is still a possibility. If we happen to break the ATH I would then watch out for the 2.618 level. This would mark the completion of a Bearish Gartley, and I would expect a heavy retracement at that point.
Thanks for the read, and I wish you all the best of luck!
DISCLAIMER: Please note I am only providing my own trading information for your benefit and insight to my trading techniques, you should do your own due diligence and not take this information as a trade signal.
Order cancelled
⋅
This is why the chart above was filled will confrimation levels. Not one has yet to be hit. Here are some key levels to watch out for on this swing up. Good luck!!
what are your thoughts right now, at the moment it just reached a high of ~$5200 on BitMEX and I have bought a short position right now expecting a large pullback at least to 4950 (where my take profit is). Do you think this is good short term trade, and i think now it requires further analysis. What are your thoughts
RacingToRacine
⋅
I see your logic in the "artificial pump" comments. But I do wonder: If people have been converting other alt coins into BTC, by the time the drop in alt coin market cap occurred, they would have already sold their BTCs for USDs. Wouldn't this have caused the artificial pump in BTCs to deflate at that point? I am new to this market. So maybe there is something that I do not yet understand.
dominik_oh0
⋅
i love your charts oh92 but I also love how BTC broke straight through the top on this one :D
Risky trade, takes guts to short in such an unknown territory (we might as well see a rally after 5k), but can see the logic... Personally I think altcoins will keep falling due to regulatory attention. Good luck with the trade!
AlexSmith17
⋅
so you think the most likely outcome is a correction to $4700 USD levels however it is possible for further gains especially given the recent news about Russia possibly placing restrictions on cryptocurrencies. And if it does double top then do you think it'll fall to the 4700 level or go even lower past that support?
oh92
⋅
@AlexSmith17, I actually believe a correction to the the major trendline is the most likely outcome. Which could be around the ~$4600 area.
If it double tops further analysis will be needed. However it could lead to an even greater long term downtrend.