If we fail to hold this golden pocket zone we will look for an entry at the OTE (0.705 fib). As highlighted with the red lines, we can see both long and short stops still remain in the market. Liquidity can be found beneath the long stops and above the short stops, market maket will look for these stops to grab liquidity.
What is OTE? OTE is the Optimal trade entry, it is specified as the 0.705 fibonacci retracement The OTE is found to be a very reliable retracement level that often is visited by market makers.
Our current price action looks like a retail trap, we are trading at the 0.618 fibonacci retracement but are not seeing any significant bounce yet. Market makers will usually try to take the long stops before going up, these can be found just beneath previous low at 3535 USD on Binance respectively. We are trading just above this previous low and there would be little reason to go up without taking the liquidity. Coincidence or not, the OTE can be found just below these long stops and would be our long target.
What is OTE target? OTE target is usually just above previous high The 0.272 fibonacci extension is usually a fibonacci extension that will be found after hitting the OTE
We can also see that liquidity of short stops still remain at 4450 USD on Binance respectively. Again, coincidence or not, the short stops, and thus the liquidity, can be found just above the target of the OTE, this would be our sell target (0.272 fibonacci extension)
Hiting the OTE and then hitting the OTE target will mean we take liquidity on both sides perfectly. It also has some confluence with other factors like Elliot wave and wyckoff, I will update these below.
For information about the OTE and the trademarks of market makers I highly recommend checking out: innercircletrading (link found below) Innercircletrading provides high level content and all credits concerning the OTE go to him. youtube.com/watch?v=Cg0-CFJOJvg&t=592s
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We can see 5 waves down followed up by the corrective wave A up. We are currently making our wave B. To complete our Elliot wave cycle we still need to make a wave C up. The target of our wave C would be the 0.272 extension. Wave C usually ends just above wave 4 which the fibonacci extension confirms
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Possible wyckoff forming, if the position of the wyckoff is correct we will follow the liquidity hunts perfectly. Firstly we will form the ST and take the long stops, afterwards we will make a push above our previous high to take short stops. This scenario also has perfect confluence with our ABC correction and OTE entry and target
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0.382 retracement since we broke out our consolidation also has perfect confluence with our 0.282 extensions target at around 4480 USD
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more fib level confluence
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PA looking to develop a bear flag, was rejected by the 0.5 fib which makes the 0.414 extension the most likely target. This 0.414 fib has perfect confluence with our OTE
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OTE fib magic, hit a different OTE but same principal. Respected this fib perfectly previously and now heading back up again as predicted
Trade active
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long stops taken again, 5 waves down, let's go!
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on the wave 3 right now, let's make 5 waves up to grab that liquidity above 4450
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Boom, target for wave 3 hit. If we draw a fib extension from the candle open/closes of wave 1 we can see our 2.618 fib extension is right above our short stops. Magic