Bitcoin From Bearish to Fear to Panic, Low Incoming?

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
So yesterday we i gave 2 possible targets, one around 3200 (which would be a bear trap move) and the second around 3050 which would simply be the target of the bear flag . We saw that short squeeze happen out of nowhere, up to 3550. It was a 300 point squeeze, which usually is a big one, but it got sold off so hard and quickly again, it shows a lot of people were very eager to short there or simply just sell their Bitcoins' there. This is a very bearish sign, but it does give us a good level to watch. Meaning, that if the 3550/3650 (red resistance lines) break, we can assume the panic might be out of the market, at least for the short term.

On the left we can see 3 different channels. The blue one is a legit one i have shown a few days now, the purple one is halfway of confirming and the red one still has to be made. So the last 2 are just assumption. This way we can prepare our selves, in case they become legit channels. I have labeled them as a normal bearish channel , a fear channel (actual confirmation that yesterday's squeeze got sold off so quickly, showing the fear) and the panic channel. Now unless this market drops to zero, these panic channels usually end at a certain point.

In the middle we can see a big triangle, from the looks of it we can assume it is a legit triangle. There are several reference points, with many around the breakout even. Testing the support several times AND the retest as a resistance. Making the triangle very legit. The target of this triangle is around 2700/2900. I can not say where it will end, because if the panic sets in, it can extend a lot. But if it's a target where smart money is waiting to buy, we could see it more on the upside. Problem is, as soon as big stop loss level start to get triggered, a snowball effect starts. Meaning if one big stop level gets triggered, that sell volume can trigger the next and so on. This means that at a certain point there have to be more buyers than all of this sell volume to catch the price. This is why high volume is so important during panic lows. Because it shows a certain interest of buyers which eventually becomes a new support zone .

The 3000 is an important psychological level, so we can assume many people will use that as a stop loss level. Assuming smart money is waiting to get in around that level, they usually try to push through a certain support, trigger stops AND breakout traders (these traders short when a support breaks), creating a lot of selling volume . This smart money than simply just put there big buy orders and wait for everyone to sell in to their orders. This way they get the best prices, with high volume and most importantly, they can fill their bags without even moving the price up because of their high volume . Just look back at the 6000 level, the few times that level broke in 2018. Take a look and you will understand much better what i am telling you here. Now this does not mean they buy it long term, could be but i don't know. You can find that answer as well when you look back.

No these trend lines are very important, as soon as they break, the whole panic story becomes invalid. The target of the triangle does still apply though. A break of 3600ish (red resistance zone , is a big level for the bulls to break. The 3800ish level will invalidate the triangle and it's target. If it would not be weekend and especially Saturday, i would be much more confident about this bearish scenario, but almost all the time nothing real happens on Saturday. But we had a big move a few weeks ago as well. So i would be prepared at least.

As soon as that purple channel or the red breaks (or the one in the middle chart), we can assume the panic version is off the table, at least for now. A break of 3600ish means the same as well, might even mean a temp low is set. When looking at alts, they made decent bounces up yesterday, but they are already back towards the lows again, showing there is still a lot of fear in the market. So i simply can not assume the low is set now. Only a big rally can confirm a low. Like we saw yesterday with that squeeze, but that one failed completely. It has to be a rally/squeeze, move a bit sideways (usually a bull flag ) and than make at least a second wave up. As long as this does not happen, do not assume a big low is set.

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Previous analysis:
Comment: Looks like a small bullish wedge

Comment: If it goes up, the wedge only has a target around 3410ish. If it drops again there, doesn't change anything yet.
Comment: I am taking the day off today (most of the day), first day in a month or so. So i won't be here to guide you through it. Just don't forget it's Saturday, usually most manipulation on this day. Good luck everyone :)
Comment: Of course we see action happening again while i am gone. Just got back, so still need to look at things first but these bull flags look pretty solid. The lows of these flags should have been set already, so if we stay above the 3380/70, looks like my whole bearish view can be flushed through the toilet :). Just saw a very weird spike on Bitfinex, reaching even 3800. So looks like some whales have a changed their game plan?

Comment: Still have to catch up on things, but when zooming out a bit, the third chart from the primaty chart, where i show a bear flag, is still in full play though. So it's safe to say, that if this bull flag from the previous update fails, this bear flag is probably in play together with the bearish scenario. So i might have jumped a bit too fast to my previous "conclusion". Se the current bull flag is very important now.

Comment: Starting to look like a Bart move already. Bull flag can still happen, but already looking like crap.

Comment: Okay, the only successful bull flag, from the past months maybe (need to check it), was the one we had a week ago around 4000. So far it is looking the same. Volume is lower, but today is Saturday and the previous bull flag was a weekday (Wednesday). So the volume might still be legit.

There is one very important difference, the successful one happened after making a very solid low around the 3500/3600 that to much more time to form than the current low. So the foundation was much more solid then, that it is now.
The groundwork for the double bottom pattern was set back then and the 3500/3600 was tested many times and the bulls pushed back many times, showing the bulls not to F with them.
This time we only had 2 shorts squeezes, so actually not even buying, just whales playing games, throw in just enough buy volume to trigger some piled up stops and let the order book do the rest.

So objectively, this bull flag is less likely to succeed. The foundation is very different. But, we have an easy road map now, putting both bull flags next to each other. So a break of that green support, around 3370/75 might be a small confirmation of a fake bull flag. So just watching to see what happens. Okay good luck all, i will try to update again tomorrow.

Comment: I adjusted the channels from the first two charts, showing there is still room to be inside those panic channels

Comment: Here you can follow the Bull flag or Bart pattern more closely

Comment: The panic channels are clearly off the table now, everything from the original charts actually is, except the blue line from the left chart.

That is actually still very important, because the 3600ish zone is the previous support zone from the past 2 weeks. This is still a key level!

When looking at alts i am not seeing the conviction we have seen with Bitcoin, so my first thought is, its just a correctional move up we have seen today. At the moment we just broke a small upwards trend line from today rally, so we could drop again, unless we see a small bull flag forming at this very moment (3540ish)

Comment: I find it difficult to judge what the next step will be, there is at least one thing i can mention with some certainty. That is, if we do move up a bit from here (after forming a bull flag). If the rally becomes smaller than the previous one, and volume drops along with it. It will very likely turn in to a fake rally that will drop again. To form at least a higher low around 3300/50 or simply drop below the 3200. So if we continue to move up, with the current speed, the volume needs to increase along with it, otherwise it will just be a matter of time until it fails.

These trend lines are something the whole market is looking at all the time (red line), they have been failing so many times this year. Especially on the higher time frame. Those breakouts from the descending trend lines from the 20K high in the first 6 months of this year.

When looking at these 8 alts, only Dash seems bullish, the rest are simply still bear flags to me. I hate to be stubborn, but i simply not get bullish with alts being this weak.

Comment: The possible bull flag i mentioned earlier
Comment: Seeing a small bounce up now from that trend line, so far it can be seen as a pull back.
I am still not liking the volume on the breakout though. There is a second chance with this pullback though. If we move up from here and see volume increase significantly, it could move up much more, maybe even break the 3800.

I think the volume will fall short and we will drop again here or at a later stage like the blue line.

Comment: If the current level holds, around 3400. And we move sideways for many hours (bear flag) i have a complete game plan ready now for the coming days. I will try to write a new analysis later today about it.

I have not looked at all things carefully yet today, But we can see alts are looking very bad, Bitcoin's 3400ish level seems to be a very important support as well here. So it's looking bad now. So i hope we see support here, make another wave up tpwards 3600/3800. If that happens, i will show you my game plan, i still have to write everything down and i have some personal things now, otherwise i would post it already).

For now, it seems that blue line from above and the primary chart of the left one, is still in play. A simple retest of former 3500/3600 zone and down again. So if the 3400/380 breaks, it could be the final support until the 3200.

Good luck everyone.
Comment: Looks like we have a tight range now between 3350 and 3430. In the chart we can see the support is still showing some bulls buying it. So there is a chance for a move up to 3500 (lower high) or 3700ish) higher high. My general view is still down, i just think we might still see a correctional move up.

I don't think the low is set yet. These moves are much more difficult to judge since they overlap support and resistance levels all the time. Makes it very difficult to judge.

Shorts on Finex are slowly dropping the past days, so there are some people think a low might be set. Funding on Bitmex has dropped to zero, so the same thought is shared there as well it seems.

So a break of the 3350/3430 range might give us an answer for the next short term move

Comment: Moving inside of a small triangle here, but with these it can break on both sides!

Comment: Bulls were too weak again the past 24 hours, making a few attempts to break up but each time the high became lower and eventually it formed a bigger triangle than i showed yesterday from which we just broke the support. The target is around 3300.

When we zoom out a bit, we can see a bigger (possible) bear flag as well. I do not like it that much because it is a bit to steep (normally want to see a bear flag be more horizontal than this. On most exchanges the support line already broke, but when we look at Bitfinex it is probably still above it. But as long as we don't see a decent bounce up above yesterday's high it is very likely it will break.

Alts are also still looking very bad, as i mentioned a few days ago, based on those the upwards potential is very limited. There is a potential for higher lows there, but if we do not see something like a Bart move (or just a squeeze up), they will probably just continue to drop as well.

For me it feels like the upwards correction has not completed yet, meaning a drop now is too soon. But i don't think the market cares about what i feel :). I am usually not wrong about these assumptions, but to be honest, i had the 3380/3400 as a low in mind and because we did NOT drop yesterday after the support broke, i thought there is a good chance something else might be going one, meaning going up a bit to 3500 or 3700 before dropping again. So at the moment i can't really say with confidence which way it will go. But based and basic TA, it's a simple bearish setup here.
Comment: If we don't see a bounce soon, we have to assume it will drop. On Finex it is still hanging at that potential support line of the bigger bear flag. The long it takes the bigger the chances for a drop
Comment: Because it keeps making small drops after each level that breaks, i just can't help but think some people are loading up longs here, but all the TA signs say down. Even Bitfinex broke that bear flag just now. So all the signals are red now. Moments like these i rather not touch it. It''s almost too obvious it should drop, but why isn't it. I want to make a new analysis, but i simply don't have a good game plan at the moment. The one i had in mind 2 days ago already failed when the 3400 broke. So now i have to think of a new one. I just hope we get a decent move up or down soon, so i can make up a plan.

Comment: Still moving inside that channel on the left.

On the right we can see the current 3300 level is where we have seen many bounces happen already. The only 2 breaks we had, turned into bear traps. So this tells me, this level is where the whales do their thing it seems

Comment: New Bitcoin analysis:

Comment: Here we can see the 2 levels i mean, 3360 and 3440.

On the left, it says we should still have one more drop in the low 32xx. If we stay below the 3360 it will probably happen, unless we move up from the current spot. I think a break of 3360 will make my double bottom pattern valid for 35%, a break of 3440 will make it 70%. Of course THE level to break is the previous high around 3600. if that one breaks, we should move up towards the 4000

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Love your work and can I suggest adopting another lens when considering your trading ideas. This market has been manipulated by a number of whale who have made fortunes riding this wave from its early stages. They have very large positions at stake to protect. They have less influence now in social media but continue to be very active traders in the market. If I were a whale I’d be trading in a counter TA manner to continue to reinforce moves up and thwart moves down. I’d be using some of my war chest to protect my fast declining wealth. Perhaps when you consider your trading ideas, imagine there is a large trader seeking to strategically enter the market at key junctures to manipulate trading signals. I’d love to hear how you would monitor this and react to it.... cheers
Seems like 400$ on finex too strong to break. Many large long orders of 300 - 400 Btc have been filled. Lets see.
Broodwar86 Broodwar86
@Broodwar86, 3400$ of course^^
right on time?
+1 Reply
Broodwar86 ElroyRyon
@ElroyRyon, bounce failed again.
kardia Broodwar86
@Broodwar86, Of course, because it wasn't meant to do anything more than stop retail traders out. Whales are playing mind games with us to get us to give up our bags cheap.
There are frankly no Bulls. The only bulls that are left, are honestly just Whales doing pump and dump on shorter sell traders and creating temporary shot squeeze. I don't think any Longs who are in the right mind, will buy in now.

This is a trap market designed by Whales for those traders who think they are smart enough to play it.
+5 Reply
Thanks for the Update - great work!
+1 Reply
botje11 Broodwar86
@Broodwar86, Your welcome :)
+1 Reply
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