BTCUSD update: It appears price action cannot make up its mind upon first glance. A break out attempt around the 6600 level fizzles out as short interest climbs even further. On the surface this may "feel" bearish, but the internals are still pointing to higher prices.
At S.C., we focus on probabilities, not feelings. Feedback from a cross section of our members suggests that the general consensus expects price to collapse once again. When you compare this to the fact that short interest is increasing while price is not pushing lows, it is more of an indication of a market brimming with hidden strength.
Increasing short interest means bears are continuing to pile into the obvious trade. And this makes perfect sense when price is pushing new lows, but the 5750 low established in June is still intact. If shorts are selling more, and price is not making progress, what do you think that means?
Clearly there is more buying than selling, but it is not obvious yet. In other words, this structure is most likely a bear trap. If price continues to hold above 6K, this bear population will be naturally forced into buying. When this happens, it often leads to a vertical candle that results from the numerous margin liquidations that follow.
At S.C., we acknowledge the formations and patterns that are visible, but we also consider what is not visible. And that is the probability of the general location. Considering both perspectives is what builds context and helps to align decision making with market intent, not our ego or opinions.
What if we are wrong? That is a possibility and why we protect positions and our portfolios with defensive measures like smart position sizing and stop orders. Price can reasonably retest the 6K level, but we are willing to risk the profit that we have in our recent swing trade in favor of the broader probability.
In summary, a chart is a visual representation of order flow. And order flow is naturally governed by the irrational forces of greed and fear. The high element of randomness makes taking chart analysis at face value an even tougher game to play. This is why it is so important to always consider what the chart is saying, and what it is not.
In the case of Bitcoin, it is showing bearish information within the midst of a bullish location. Bearish information is most useful at resistance levels or highs, not lows. And that is the context we use to weight our analysis appropriately. Our objective is to bet on probabilities which is often on the opposite side of the herd mentality. Which side do you choose?
Hands down, I choose the S.C.(Seeking Cryptos) side! I could not be more proud to be a member of such an innovative team. Time & time again, you folks profoundly illuminate a dark sky with light. As you say, "Adverse market conditions are where skill and experience really come into play. Any amateur watching a chart for a week can call great trades in a bull market. Reality separates the authorities from the fluff marketers in this game." It's transparently clear the S.C team truly are the authorities. Your market updates are clean and straightforward. If we are given plays you fully articulate both price action and market dynamics, rather than instructing members to simply bet on chance as other groups do- we may as well flip a coin. If we are directed to deviate from a script a modified market update immediately follows with clear rationale re-strategising. Your guidance is unsurpassed as you would never allow your members to single-handedly navigate unchartered waters alone, as a member this means everything to me. Thank you for ALL that you do.
Jolgan
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@IrenaLouis, what happened to my reply to your comment?
IrenaStory
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@Jolgan, "You can send report to moderators. The comment from Jolgan will be checked. If the comment contains anything that violates our House Rules, the comment will be removed and its author will be penalized." Good luck!
Jolgan
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@IrenaLouis, Ok, so it was you who considered my reply violated House Rules, i don't see how it could be so.
Can you explain? I'm guessing you didn't understand it, but that's just a guess
@aamonkey, yop looks good, but i doubt BTC will penetrate 5000-5500 so easily. It will bounce, 5000-4000 USD no significant support. If it will get so low, it will get maybe to 3000 USD too
EduardZimmermann
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@MarcPMarkets "Which side do you choose?" Answer: The one where the money flows to (; and not Alice in Wonderland where the reality is absent and you^re on an odyssey in a big dream. (: Seriously, the trading volume declines since mid of march. How can the price of an asset rise when there is no appropriate trading volume? Please have a look at my analysis dealing just with volume. Alice has a big stack and volume doesn't have the focus it deserves. This applies to many TAs i've read lately. For me the current situation is pure gambling.