Bitcoin – The Alarm bells are Ringing. Not Clickbait!
TLDR:
• My idea is that Bitcoin reached a local top, or it is close to a top and it is heading for a correction.
• This does not require you to take immediate action, just keep an open mind and be careful.
• I was very bullish on Bitcoin short and long-term but, as an analyst and a trader I HAVE TO RECONSIDER MY BIAS EVERY DAY. This is not about my ego, I am here to make money!
Bullish Invalidation:
1. Invalidation is if Bitcoin breaches the 33K level and sustains above this level.
Bearish Confirmation:
1. A daily close below 29.5
2. A daily close below the up-trending support line.
The Evidence for the Bearish Case:
1. Bullish PA is Diminishing in Strength.
• The first impulse-up led to a 55.31% price increase in 53 days.
• The second impulse up led to a 58.51% price increase in 35 days.
• This impulse up, has, so far, led to a 27.22% price increase in 27 days. It is possible that we are only in the middle of the impulse up, but it is also possible that the upward momentum is fading. Even if we make it to 33K it is only a 33.13% price increase.
2. Weak Bearish divergence between wave 3 top and wave 5 (current) top.
• A weak bearish divergence is when the price makes a higher high and the RSI line shows a double top.
• Granted, it is only a weak bearish divergence. Furthermore, maybe the top is not in yet. However, it is something we should pay attention to.
* btw, I am not an EW analyst. the 5 wave formation is just for convenience of presentation.
3. The 33K Level is Strong Resistance.
• The 33K level is the dividing line between a bull and bear market. The first bear market rally in 2022 started when we reached 33K. Strong support then, now turned to stiff resistance.
• To break this divide we need demand. Bitcoin has made progress from the bear market level but to break and sustain above the 33K we need more buyers. If you think Blackrock is going to do this, I will give my 2 cents about BlackRock in the next paragraph.
4. Liquidity is to the Downside.
• Bitcoin’s impulsive PA left liquidity pools to the downside. I am not claiming that Bitcoin has to retrace because of this liquidity. Even if Bitcoin does retrace, it doesn’t have to get back to a bear market level. However, if bitcoin does break below the trendline, these liquidity pools will become targets.
The next paragraphs are about fundamental factors. This is just my opinion, but…
5. BlackRock is a Wolf in Sheep’s Clothing.
• If you think that BlackRock is going to pump our bags with its ETF, I think you are naive. Blackrock wrote the book of “Buy Low and Sell High” and they can quote every chapter and verse in this book. What is more likely? That BlackRock will pump the retail bags? Or, maybe, they will crash the market and buy the same bags for cheap?
6. A Lot Depends on the FED.
• Bitcoin and Crypto in general do not have a narrative. The wider public is not in, yet. We are in a market driven by fundamentals. Bitcoin’s PA depends on the FED raising rates, or not raising rates. There is no inner strength, and this makes Bitcoin vulnerable.
Conclusion:
• It doesn’t pay to be a bull or a bear. Take what I wrote as a warning and pay attention. If Bitcoin fails to break above 33K bias is to the downside and you should favor shorts. If bitcoin does break above 33K and sustains above this level then bias is to the upside and you should favor longs.
NFA.
What do you think? Please share in the comments.
Best Wishes.
• My idea is that Bitcoin reached a local top, or it is close to a top and it is heading for a correction.
• This does not require you to take immediate action, just keep an open mind and be careful.
• I was very bullish on Bitcoin short and long-term but, as an analyst and a trader I HAVE TO RECONSIDER MY BIAS EVERY DAY. This is not about my ego, I am here to make money!
Bullish Invalidation:
1. Invalidation is if Bitcoin breaches the 33K level and sustains above this level.
Bearish Confirmation:
1. A daily close below 29.5
2. A daily close below the up-trending support line.
The Evidence for the Bearish Case:
1. Bullish PA is Diminishing in Strength.
• The first impulse-up led to a 55.31% price increase in 53 days.
• The second impulse up led to a 58.51% price increase in 35 days.
• This impulse up, has, so far, led to a 27.22% price increase in 27 days. It is possible that we are only in the middle of the impulse up, but it is also possible that the upward momentum is fading. Even if we make it to 33K it is only a 33.13% price increase.
• A weak bearish divergence is when the price makes a higher high and the RSI line shows a double top.
• Granted, it is only a weak bearish divergence. Furthermore, maybe the top is not in yet. However, it is something we should pay attention to.
* btw, I am not an EW analyst. the 5 wave formation is just for convenience of presentation.
• The 33K level is the dividing line between a bull and bear market. The first bear market rally in 2022 started when we reached 33K. Strong support then, now turned to stiff resistance.
• To break this divide we need demand. Bitcoin has made progress from the bear market level but to break and sustain above the 33K we need more buyers. If you think Blackrock is going to do this, I will give my 2 cents about BlackRock in the next paragraph.
• Bitcoin’s impulsive PA left liquidity pools to the downside. I am not claiming that Bitcoin has to retrace because of this liquidity. Even if Bitcoin does retrace, it doesn’t have to get back to a bear market level. However, if bitcoin does break below the trendline, these liquidity pools will become targets.
5. BlackRock is a Wolf in Sheep’s Clothing.
• If you think that BlackRock is going to pump our bags with its ETF, I think you are naive. Blackrock wrote the book of “Buy Low and Sell High” and they can quote every chapter and verse in this book. What is more likely? That BlackRock will pump the retail bags? Or, maybe, they will crash the market and buy the same bags for cheap?
6. A Lot Depends on the FED.
• Bitcoin and Crypto in general do not have a narrative. The wider public is not in, yet. We are in a market driven by fundamentals. Bitcoin’s PA depends on the FED raising rates, or not raising rates. There is no inner strength, and this makes Bitcoin vulnerable.
Conclusion:
• It doesn’t pay to be a bull or a bear. Take what I wrote as a warning and pay attention. If Bitcoin fails to break above 33K bias is to the downside and you should favor shorts. If bitcoin does break above 33K and sustains above this level then bias is to the upside and you should favor longs.
NFA.
What do you think? Please share in the comments.
Best Wishes.
