As per the last call - Bitcoin has had its move up. Check the link below.
Here are a few reasons for it to drop - Don't get me wrong, I am still very bullish on this as a whole. But as a trader, we can rise these moves both ways.
COT data still shows a net short position for BTC - making this a possible Bull trap breaking the ATH.
In addition to that - step out to the monthly timeframe; Filling in the wick is common practice - setting a bull trap at a monthly regression high.
The monthly and weekly have overbought Stochastics. As well as the weekly hype plateau.
As for the daily timeframe - you can clearly see a regression high touch nearing. We still have a little momentum in the Quadratic curve, as well as the Stochastic levels favoring a little nudge up before its consolidation phase.
On the 4 Hour - we are also agreeing with the points above - nearing the highs on the Regressions and Stochastic areas.
We are also approaching a Mean Reversion level high on the 4 Hourly
Lastly - the Crypto domain is having a nice rally, including altcoins. We can see from the Crypto Strength 2/3 main currencies are still sat in Bullish momentum.
See the previous posts for more details.
Have a great weekend!
Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
I'm cautiously watching this new ATH. This correction (my count pegs it as a wave 4) seems too shallow and didn't seem to last long enough. I'm thinking it's forming an extended flat correction with wave B reaching the 62500 (fib 123.6%) and then the 5 wave impulse down which should, in theory, reach the 1.236 or 1.618 Fib extension at just below 40k. This level is also the Fib 0.236 of (what I consider to be the entire) 3rd wave and it's where the 100D MA (and 21W EMA) is clearly heading. That and the volume of this break-out is rather unimpressive...
bowtrix
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@MiketheN00B, that is really insightful! I hadn't actually noticed that was a possibility before you pointed it out.
Mayfair_Ventures
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@MiketheN00B, Yes 45k looks like an interesting level. The thing with BTC at the moment is without the stability of full-scale institutional money it can be volatile beyond normal trading ranges. Would not surprise me to see a very long wicked candle and collect the stops.
MiketheN00B
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@Mayfair_Ventures I think so too. It's going to wiggle lower for just enough to create a long wick via a long squeeze.
I'm curious about your opinion on the "On-chain" metrics? I'm curious because so far they seem to predict the support zones pretty well and I can't say I truly understand all the on-chain data.
Do you look at whale maps sometimes?
Mayfair_Ventures
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@MiketheN00B, No, I am in the VC game as an investor so we get to see the tech trends early. That coupled with a few years doing the trading it paints a certain type of picture. Also, BTC is fascinating at the moment during this transition phase. Then you have Sentiment and COT, also interesting as they compliment a bull trap situation here. And so far, it's exactly the move that seems to playing out
ianrdouglas
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@MiketheN00B, I was watching Binance on the Tensorcharts heatmap, and for what it's worth, in the breakout, buyers were outnumbering sellers two to one. I tend to agree with your other points. But the 0.786 from the initial downside impulse was resoundingly demolished. I think there remains uncertainty on the direction this will go.
MiketheN00B
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@ianrdouglas,I will definitely read about those heatmaps, thanks.
Mayfair_Ventures
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cmzzxqnau
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Thanks for sharing, love the detail. Out of curiosity, in your last chart, where did that red trendline come from?
Mayfair_Ventures
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@cmzzxqnau, It's part of the moving average, to do with this indicator (speed of momentum)