In yesterday's post "The End is Nigh for Bitcoin" I said the battle will play out this weekend between the bears and the bulls. Well, the skirmish started Friday evening with a huge bull spike that turned into another Bart haircut. This morning I woke up early after smelling beef roasting on the barbecue. After wiping the sleep from my eyes, I saw the bears were grilling steaks on the barbecue for breakfast. (It wasn't a pretty site for those who were long)
The whale must be a Simpsons fan because Bart's head is drawn throughout this battle of supremacy between the bulls and the bears. I redrew yesterday's chart for 30 minutes so the price manipulation is more apparent. The whale uses large volume spikes for 2.5k buys followed a few hours later by 2.5k sells throughout the month of July. This is used to trigger stop losses by shaking loose BTC from the weak hands. You have to have nerves of steel to trade overnight without stops in this field of battle, especially if you are leveraged.
What happened overnight? The price fell through the red trend line that formed way back on April 1st. The price needs to get above this trend line if it has any hope of being bullish again. The price has also fallen below the 0.382 Fib level. We are also back in the green channel, headed downwards. Even with all of this carnage, the price is back to where it was on July 18th. In this manipulated market, I feel all of this hope and despair is used to unnerve the amateur trader into giving up. There is no other reason to spike the price up by $500 to entice in the bulls, and then to spike the price down a few hours later.
Unless BTC shows some form of strength by moving above the 0.328 Fib level and the red trend line, we are headed to the support zone at 8k to 8.5k. This will be confirmed if the price makes a new low for July so watch to see of the July 17th low of 9251 is broken to the downside. If this happens, I may want to do laddered buys all the way down to 8k. Will it drop more than 8k? Only if we get a black swan event like Tether or Bitfinex being charged by the NY Attorney General which will send the BTC price plummeting for a couple of weeks. In the long run this will be a good thing because most exchanges are as crooked as a dog's hind leg as my granddad used to say.
Please hit the like button if you like this analysis. As always, this is not investment advice. Please do your own due diligence when buying or selling crypto currencies.
@kryptochristo, if you like conspiracy theories, I have one of my own. And it concerns using stop losses on ByBit exchange.
I caught some of the up move this morning. Then this afternoon it looked like it was going to dump so I shorted it. And waited. The dump stopped and then traded in a range. No problem. I can wait. It looked like another dump was going to start, then stopped again at exactly 9966 for the 2nd time. I eventually got stopped out late this afternoon when the price rose and hit my stop exactly, down to the penny, then reversed direction. Now the price is headed down.
I don't know why, but whenever I use a stoploss, the price will home in on it and trigger it, then reverse direction. I've lost count the # of times this has happened. After triggering my stop, the very next minute, the price reverses direction sometimes with a dramatic price reversal as high as 3%. A couple of months ago I had a $400 spread between by stop and the BTC price. I was shorting BTC and overnight, the price crept up and after a couple of hours, triggered my stop down to the dollar, then the very next minute the price reversed direction and the started falling again. My stops are like price magnets. LOL
Has this ever happened to you on a consistent basis? I have only experienced this on ByBit.
If you want BTC to hit a certain price, let me know and I will set a stoploss at that price. LOL
Slippery09
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@BDG, Just to be Devils advocate,
is it not a case that you are placing your stop loss at the logical place, there fore stop loss hunters are seeking the same point?
I just started watching "school of trade" where Joseph explains how he deliberately targets the stop losses to increase profits.
BDG
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I forgot to include the Volume Profile on the chart which shows the price where the accumulation occurred since the major bull run started, on April 1st 2019.
You will see the 2nd largest accumulation occurred around 8k. (Near my strong support zone)
Below that you will see the largest volume accumulation is at 5185.
I doubt the price could fall below either of these levels without major negative news on BTC like a Tether/Bitfinex scandal. If we do get a scandal, I doubt the price drop will last longer than a week or two as big buyers will scoop up BTC with both hands.
Conspiracy Theory:
Wall Street may have a scandal already planned and the date set in order to drop the price dramatically. I may want to put in multiple stink bids just in case. But I won't be using the Bitfinex exchange! ROFL