BITCOIN Analysis of a retracement and future moves.
As you know everyone loves to use indicators and good for them.
You use what works for you. I prefer to use Institutional Supply& Demand with Occasional Fibo’s.
I also use market profile which unfortunately is not great on Trading View.
Now we focused here on the weekly and monthly because longer time frames always win.
Let me walk you through institutional logic here. The last bull run we hit near $20k/BTC.
When BTC crashed after the last major bull run of 2017. It created a massive supply zone ranging from $12k to $20k/BTC. Yes, it seems large but with highly volatile assets you have large ranges for supply and demand.
The other reason why the supply zone is so large is because there was a ton of past indecision in supply and demand. The supply size took some time to overwhelm the demand side. And finally broke it hard around a 50% Fibonacci around $11656. Which helps us explain the difficult about 6-7 attempts in breaking the above $10k/BTC price point.
Remember dollar figures to the tee are not the be all end all in trading. Trade in terms of zones is easier.
BTC did its correction until 2019 and attempted to break the supply zone again around June 2019 with several failed attempts. And then volume if you believe that stuff came in on the supply side again to test the 2019 low of around $3/4k. Had nothing to do with COVID-19. As markets were already setting up for a test of the demand zone created in 2019.
Now let us fast forward to today. BTC has done an incredible run from March 2020 around $4k to a little over $40k.
Monthly and Weekly Fibo’s were drawn and are around the same price levels. This adds to a trade possibility in the future because we need confluence of several factors to have a high probability trade.
Now given we have 2 Fibo confluences on key price targets and a demand zone on weekly($16-20k)
We have a few confluences to tell us its high probable it will happen
The confluences summed up why its very probably to hit $16-20k
1) Weekly & Monthly fibo’s of 61.8% in line on our weekly chart
2) Weekly Demand Zone intersects with our Fibo on monthly and weekly. Another confluence.
3) Within the upper range of the past supply zone from $12-20k/BTC. Fear to set it of “oh no a crash again”
4) Weakening Demand on Market Profile on the weekly and monthly with the price increases.
5) TPO’s on 4hour show POC at lower and lower region/band of most frequently traded price
6) Declining volume on monthly for the past 3 months despite price increases. The volume is average as best and we are not factoring in January 2021 yet.
Where to do we go from here after a potential market retracement?
Well as trading is all about probabilities and past price action. If we were to make a price projection.
We would reply on Fibonacci as a tool using the 2017 bull run. Based on that we can see BTC retrace and eventually go to around $80k sometime late in the year. It is likely and healthy to get a retracement to what is shown on the charts. Based on the 1-6 listed confluences.
**Note I did not put all the analysis on here because TPO’s are not really a thing on Trading view, and simplicity is best for trading. This is not investment advice just an analysis of what is highly probable to come and what can come later in the year.
I do not need to sell you what is right or wrong you do that on your own. I do not use indicators or trend lines. Though trend lines help to some degree to get your mind off the business of bar or candlestick charts. I have yet to meet an institutional trader who says he/she based his trading decision on a Head and Shoulders or double bottom.
Good luck with your trade journey and I welcome opinions and comments. Be respectful and accept some may agree or disagree.
Thanks
Denkend
As you know everyone loves to use indicators and good for them.
You use what works for you. I prefer to use Institutional Supply& Demand with Occasional Fibo’s.
I also use market profile which unfortunately is not great on Trading View.
Now we focused here on the weekly and monthly because longer time frames always win.
Let me walk you through institutional logic here. The last bull run we hit near $20k/BTC.
When BTC crashed after the last major bull run of 2017. It created a massive supply zone ranging from $12k to $20k/BTC. Yes, it seems large but with highly volatile assets you have large ranges for supply and demand.
The other reason why the supply zone is so large is because there was a ton of past indecision in supply and demand. The supply size took some time to overwhelm the demand side. And finally broke it hard around a 50% Fibonacci around $11656. Which helps us explain the difficult about 6-7 attempts in breaking the above $10k/BTC price point.
Remember dollar figures to the tee are not the be all end all in trading. Trade in terms of zones is easier.
BTC did its correction until 2019 and attempted to break the supply zone again around June 2019 with several failed attempts. And then volume if you believe that stuff came in on the supply side again to test the 2019 low of around $3/4k. Had nothing to do with COVID-19. As markets were already setting up for a test of the demand zone created in 2019.
Now let us fast forward to today. BTC has done an incredible run from March 2020 around $4k to a little over $40k.
Monthly and Weekly Fibo’s were drawn and are around the same price levels. This adds to a trade possibility in the future because we need confluence of several factors to have a high probability trade.
Now given we have 2 Fibo confluences on key price targets and a demand zone on weekly($16-20k)
We have a few confluences to tell us its high probable it will happen
The confluences summed up why its very probably to hit $16-20k
1) Weekly & Monthly fibo’s of 61.8% in line on our weekly chart
2) Weekly Demand Zone intersects with our Fibo on monthly and weekly. Another confluence.
3) Within the upper range of the past supply zone from $12-20k/BTC. Fear to set it of “oh no a crash again”
4) Weakening Demand on Market Profile on the weekly and monthly with the price increases.
5) TPO’s on 4hour show POC at lower and lower region/band of most frequently traded price
6) Declining volume on monthly for the past 3 months despite price increases. The volume is average as best and we are not factoring in January 2021 yet.
Where to do we go from here after a potential market retracement?
Well as trading is all about probabilities and past price action. If we were to make a price projection.
We would reply on Fibonacci as a tool using the 2017 bull run. Based on that we can see BTC retrace and eventually go to around $80k sometime late in the year. It is likely and healthy to get a retracement to what is shown on the charts. Based on the 1-6 listed confluences.
**Note I did not put all the analysis on here because TPO’s are not really a thing on Trading view, and simplicity is best for trading. This is not investment advice just an analysis of what is highly probable to come and what can come later in the year.
I do not need to sell you what is right or wrong you do that on your own. I do not use indicators or trend lines. Though trend lines help to some degree to get your mind off the business of bar or candlestick charts. I have yet to meet an institutional trader who says he/she based his trading decision on a Head and Shoulders or double bottom.
Good luck with your trade journey and I welcome opinions and comments. Be respectful and accept some may agree or disagree.
Thanks
Denkend