Through the Eyes of the Market Maker VII
Overall, I think we retrace to somewhere between 5500 and 6k before we head back up.
Full disclosure: I will be trading with BTC as my base pair from here on. I will likley sell alts if we see a hard fall, but I will stay in BTC and not use stable coins. I am of the belief that 3K was bottom and we won't see anything below 4K again.
NOTE: This report does address the possibility of a rise past 10K. Also, Rock bottom for a retrace is 4200 in my opinion.
First, I want to address the macro price action for supports and resistances. Please see chart below We see last year's resistances not yet broken are 10K and 12K. 10K is a psychological number. The general public will see 10K and likley FOMO. The market makers know this and can operate in a few different ways:
1) With all eyes on 10K, poeple may plan to let it ride until 9800 to 9900 and sell before resistance. Market Makers (MM) may short before this happens to maximize their profits.
2) Price could be pushed up just past 10K so that the market FOMO's and then we see a short. Like a giant version of what happened at 9100. I was watching order flow 2 days ago on Bitmex and the 9100 move was preceded by several million in longs. These are the big boys playing. I watched retail fomo into it and get slammed down by an even larger number of shorts at the top.
3) Price could act normally and reject around 10K.
Next, I will point out that every year since 2013 except the bear markets of 2014 and 2018 there has been a May pump, a retrace through late July, and then we take off for Q4 to a peak. Even 2102 had a may pump, but the market was not yet mature and there was very little retracement to it's peak. This does lend itself to my idea that we may retrace before we go on the big bull run that everyone is expecting. We CAN, however, make the case for no retracement or very little retracement due to the new fundamentals behind BTC with institutional times and more adoption coupled with the halving coming in 11 months. It's well documented that price rises into and after each halving. The sentiment for BTC will only build from here barring any kind of fundamental issues.
Next, I will dive a little deeper into open interest. This report addresses 2 types: 1) is a more crypto-centric sample via Bitfinex and 2) is the overall market view from dailyfx which will be cited at the end of this report.
1) Bitfinex is currently 53% vs 46%. The market is overall long, but I don't think it's lopsided enough for the MM to want to stop hunt. As well, the market is overall incredibly bullish, so I think they will want to push up a bit more to get as much retail long as possible before they stop hunt. Pushing down in to a very bullish retail market at the wrong time can backfire on the Market Makers. As well, the longs are a bit more erratic right now while the shorts seems to be steadily and slowly/methodically increasing their shorts. In my experience, retail traders=emotinal=erratic while whales are much more methodical. If this is true and whales are increasing shorts, then I think we can guess what is coming at some point soon (see chart below)
2) IG Client Sentiment on Daily FX has a broader market view. I will cite this at the end of this report. Below is a quote from them with which makes a good case for a pullback:
"Bitcoin: Retail trader data shows 75.9% of traders are net-long with the ratio of traders long to short at 3.15 to 1. The number of traders net-long is 3.1% higher than yesterday and 13.0% higher from last week, while the number of traders net-short is unchanged than yesterday and 16.7% higher from last week...
...We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Bitcoin-bearish contrarian trading bias."
Next I will look at price action and order blocks.
1) VPVR:
I like to use market profile/TPO, but unfortunately I can't seen to paste that on this report. I will use the VPVR as this is a simpler version of market profile based on volume. Please see notes and chart below:
Price will likely continue up toward
9400 area IF
1) we can break above POC and THEN
2) Break above the VAH (currently 8800 area aka last night's high
3) break above the prior test/rejection at 9100 area
2) From a price action standpoint, we are currently above EQ in the current range. We tested 9100 and came back down to retest a local support built during the last 3 days or so. As long as we are staying above EQ, the probability will be that we retest 9100. A resistance cannot normally withstand multiple tests. Also the prior test looked very much like the MM were probing resistance to see how (and if) they can successfully pierce that resistance for a move up to the 9400 area, making the case for a short term 300 to 500 point upside breakout (see chart below)
3) Fractals and Pattern Trading (for reference and confluence)
The following chart can be a bit intense. I have had success developing confluence with this method in the past. I am essentially establishing areas where probability of bullishness and bearishness increases by pattern breakouts. The chart is self explanatory and may confuse the newer trader.
Thank you for reading this and please like and follow if you feel this was a valuable read.
Citation:
www.dailyfx.com/sentiment
***Any information represented here is my opinion only and not intended to be used for financial gain. None of the information posted here is to be considered financial advice. Information posted here is strictly for entertainment purposes only. Please consult your financial professional before making any kind of investment. Investments can be very risky and any investor should educate themselves before investing by enlisting the help of a licensed financial professional. Past results are not indicative of future results in any construable way.***
Full disclosure: I will be trading with BTC as my base pair from here on. I will likley sell alts if we see a hard fall, but I will stay in BTC and not use stable coins. I am of the belief that 3K was bottom and we won't see anything below 4K again.
NOTE: This report does address the possibility of a rise past 10K. Also, Rock bottom for a retrace is 4200 in my opinion.
First, I want to address the macro price action for supports and resistances. Please see chart below We see last year's resistances not yet broken are 10K and 12K. 10K is a psychological number. The general public will see 10K and likley FOMO. The market makers know this and can operate in a few different ways:
1) With all eyes on 10K, poeple may plan to let it ride until 9800 to 9900 and sell before resistance. Market Makers (MM) may short before this happens to maximize their profits.
2) Price could be pushed up just past 10K so that the market FOMO's and then we see a short. Like a giant version of what happened at 9100. I was watching order flow 2 days ago on Bitmex and the 9100 move was preceded by several million in longs. These are the big boys playing. I watched retail fomo into it and get slammed down by an even larger number of shorts at the top.
3) Price could act normally and reject around 10K.
Next, I will point out that every year since 2013 except the bear markets of 2014 and 2018 there has been a May pump, a retrace through late July, and then we take off for Q4 to a peak. Even 2102 had a may pump, but the market was not yet mature and there was very little retracement to it's peak. This does lend itself to my idea that we may retrace before we go on the big bull run that everyone is expecting. We CAN, however, make the case for no retracement or very little retracement due to the new fundamentals behind BTC with institutional times and more adoption coupled with the halving coming in 11 months. It's well documented that price rises into and after each halving. The sentiment for BTC will only build from here barring any kind of fundamental issues.
Next, I will dive a little deeper into open interest. This report addresses 2 types: 1) is a more crypto-centric sample via Bitfinex and 2) is the overall market view from dailyfx which will be cited at the end of this report.
1) Bitfinex is currently 53% vs 46%. The market is overall long, but I don't think it's lopsided enough for the MM to want to stop hunt. As well, the market is overall incredibly bullish, so I think they will want to push up a bit more to get as much retail long as possible before they stop hunt. Pushing down in to a very bullish retail market at the wrong time can backfire on the Market Makers. As well, the longs are a bit more erratic right now while the shorts seems to be steadily and slowly/methodically increasing their shorts. In my experience, retail traders=emotinal=erratic while whales are much more methodical. If this is true and whales are increasing shorts, then I think we can guess what is coming at some point soon (see chart below)
2) IG Client Sentiment on Daily FX has a broader market view. I will cite this at the end of this report. Below is a quote from them with which makes a good case for a pullback:
"Bitcoin: Retail trader data shows 75.9% of traders are net-long with the ratio of traders long to short at 3.15 to 1. The number of traders net-long is 3.1% higher than yesterday and 13.0% higher from last week, while the number of traders net-short is unchanged than yesterday and 16.7% higher from last week...
...We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Bitcoin-bearish contrarian trading bias."
Next I will look at price action and order blocks.
1) VPVR:
I like to use market profile/TPO, but unfortunately I can't seen to paste that on this report. I will use the VPVR as this is a simpler version of market profile based on volume. Please see notes and chart below:
Price will likely continue up toward
9400 area IF
1) we can break above POC and THEN
2) Break above the VAH (currently 8800 area aka last night's high
3) break above the prior test/rejection at 9100 area
2) From a price action standpoint, we are currently above EQ in the current range. We tested 9100 and came back down to retest a local support built during the last 3 days or so. As long as we are staying above EQ, the probability will be that we retest 9100. A resistance cannot normally withstand multiple tests. Also the prior test looked very much like the MM were probing resistance to see how (and if) they can successfully pierce that resistance for a move up to the 9400 area, making the case for a short term 300 to 500 point upside breakout (see chart below)
3) Fractals and Pattern Trading (for reference and confluence)
The following chart can be a bit intense. I have had success developing confluence with this method in the past. I am essentially establishing areas where probability of bullishness and bearishness increases by pattern breakouts. The chart is self explanatory and may confuse the newer trader.
Thank you for reading this and please like and follow if you feel this was a valuable read.
Citation:
www.dailyfx.com/sentiment
***Any information represented here is my opinion only and not intended to be used for financial gain. None of the information posted here is to be considered financial advice. Information posted here is strictly for entertainment purposes only. Please consult your financial professional before making any kind of investment. Investments can be very risky and any investor should educate themselves before investing by enlisting the help of a licensed financial professional. Past results are not indicative of future results in any construable way.***