Laying Down A Marker: The Spring BTC Bull Run is Thriving
36 hours of correction is all it took for the bears to start calling for BTC to fall through the floor again. I disagree strongly and I'm going to go ahead and take the risk of publishing a counter-case.
We're at November levels of sentiment by various indicators. USDBTCLONGS/USDBTCSHORTS is at a level that has generally led to legs upward. Longs and shorts are both closing right now with the ratio tracking slightly higher. Our correction has been under 15%, just as in the Spring 2017 bull run. It made a fractal pattern of several of the falling wedge breakouts we've seen during the bear market. It landed on a channel bottom support from 2 weeks ago.
To me, this all paints a pretty clear picture - the bull market has arrived because the only sellers left are speculators - bears who want to short now so that they can buy the dip. It's no surprise that they keep calling for lower targets than we're reaching and getting caught off guard by the resilience of the bullish movement - they still think we're operating under the rules where the trend is down.
So, I sought out a way to try and show that the underlying trend has become bullish. What I came up with was the script at the bottom, which is OBV but which omits any volume bar over the 80th percentile from the previous 100 bar series - this is to say, I've tried to filter out the large volume spikes caused by individual large whale buys or sales to show what the background volume looks like. This concept works better the smaller the timescale since I'd really like to be filtering single-minute volume bars, but it does work well enough on 15m to show that the March rally exhausted itself at the double top, and that the current one is still accelerating higher in spite of the dump. On the daily chart, it also shows massive bullish divergence between Adam and Eve bottoms. It very neatly shows that there was a Wyckoff-style accumulation period right that ended with filtered-OBV bottoming on the fakeout right before the short squeeze trap was sprung.
The TL;DR of it: background OBV is picking up and in fact increased during the past 36. There are broadly just more buyers than sellers right now. The trend is up and it's going to eat bears who keep trying to fight last quarter's battles.
At this level, I expect a bounce up either immediately, or after a several days' long accumulation period. I can see good reasons to do either one from the operator's perspective. One option is that we get another accumulation period for a few days - we are, after all, in a pretty good fractal of the drop to 6500. However, there's frankly not a lot of retail volume interested in the prices at this level (I checked that with a percentile-filtered script too). If there's not much to accumulate, they could signal the bull market's strength with a dramatic rally any time they want - and this could be especially tempting if derivatives (including BitMex) get really out of line shorting this region.
If I'm wrong, we have a bear flag pointing to 8000, which is the parallel channel bottom you can draw to the bottom of the $1000 short squeeze candle. I really think though that the bullish case is winning, that we hold the support we're on, and that we eventually climb right back up - in part because there aren't a lot of bears who believe it can happen. As long as they don't believe that the bulls are winning, they're selling into the bulls' buys, and the bull run will continue.
I'm an amateur and you definitely shouldn't take anything I say as financial advice. I'm interested in any feedback.
We're at November levels of sentiment by various indicators. USDBTCLONGS/USDBTCSHORTS is at a level that has generally led to legs upward. Longs and shorts are both closing right now with the ratio tracking slightly higher. Our correction has been under 15%, just as in the Spring 2017 bull run. It made a fractal pattern of several of the falling wedge breakouts we've seen during the bear market. It landed on a channel bottom support from 2 weeks ago.
To me, this all paints a pretty clear picture - the bull market has arrived because the only sellers left are speculators - bears who want to short now so that they can buy the dip. It's no surprise that they keep calling for lower targets than we're reaching and getting caught off guard by the resilience of the bullish movement - they still think we're operating under the rules where the trend is down.
So, I sought out a way to try and show that the underlying trend has become bullish. What I came up with was the script at the bottom, which is OBV but which omits any volume bar over the 80th percentile from the previous 100 bar series - this is to say, I've tried to filter out the large volume spikes caused by individual large whale buys or sales to show what the background volume looks like. This concept works better the smaller the timescale since I'd really like to be filtering single-minute volume bars, but it does work well enough on 15m to show that the March rally exhausted itself at the double top, and that the current one is still accelerating higher in spite of the dump. On the daily chart, it also shows massive bullish divergence between Adam and Eve bottoms. It very neatly shows that there was a Wyckoff-style accumulation period right that ended with filtered-OBV bottoming on the fakeout right before the short squeeze trap was sprung.
The TL;DR of it: background OBV is picking up and in fact increased during the past 36. There are broadly just more buyers than sellers right now. The trend is up and it's going to eat bears who keep trying to fight last quarter's battles.
At this level, I expect a bounce up either immediately, or after a several days' long accumulation period. I can see good reasons to do either one from the operator's perspective. One option is that we get another accumulation period for a few days - we are, after all, in a pretty good fractal of the drop to 6500. However, there's frankly not a lot of retail volume interested in the prices at this level (I checked that with a percentile-filtered script too). If there's not much to accumulate, they could signal the bull market's strength with a dramatic rally any time they want - and this could be especially tempting if derivatives (including BitMex) get really out of line shorting this region.
If I'm wrong, we have a bear flag pointing to 8000, which is the parallel channel bottom you can draw to the bottom of the $1000 short squeeze candle. I really think though that the bullish case is winning, that we hold the support we're on, and that we eventually climb right back up - in part because there aren't a lot of bears who believe it can happen. As long as they don't believe that the bulls are winning, they're selling into the bulls' buys, and the bull run will continue.
I'm an amateur and you definitely shouldn't take anything I say as financial advice. I'm interested in any feedback.
My volatility-based indicators are available for sale at SharkCharts.live
Feel free to reach out to me with any questions; more information is available on the SharkCharts website and the SharkCharts discord discord.gg/YVpTeSK
Feel free to reach out to me with any questions; more information is available on the SharkCharts website and the SharkCharts discord discord.gg/YVpTeSK
You can lead a bear to water (and it's the right thing to do among friends) but you can't make him flip to bull. Hopefully they have tight stops and good risk management.