Reality check once again for the whole market, always having to learned it the hard way, but i will leave the psychology part for my Bitcoin analysis.
Past days have been some shitty correctional movements, not making clear yet whether this is a correction of the big drop we had past weeks and eventually continue to drop even more (meaning potential bear market). Or that we are in the middle of a correction still of the big bull market rally that started a 6/12 months ago. Meaning we are at the final stages of ending the big ABC correction i talked about past 2 months for Bitcoin.
First of all, the thick black line is to me the main trend line for ETH. This one can not break, because it would increase a lot the chances that the bull trend has really ended. The drop we saw past week was pretty big and violent, not rally fitting the picture of a bull trend, but this is crypto and things get exaggerated a lot on both sides, so keeping options open because of that. One has to draw the line somewhere and for me the end of the road is that thick black trend line. Hard part is, as you can see price dropped below it twice even, second time even way below it, but it never had a daily close below. So when do you know it will close below it? Well you can't until it really closed, why trading markets can be so mean and is very difficult.
The blue zone on the right, even if the market is in bull mode coming year or longer even, i would then see that part as smart money taking advantage of a rally going too fast and too high. As if they see that as a big advantage, getting a very big price for something that it's not yet worth it. Obviously also having the volume to push prices back down to buy back cheaper. Just imagine, if you bought at 1000/1500 and your getting 3500/4400, if you rebuy the X amount of ETH back around 2000/2500, you actually have that same X amount of ETH for free, so whatever happens you can never loose any money anymore. There is more to it, but too much to discuss now.
Now the chart on the left, this is where i try to determine what the story is for the coming weeks/months. Few days ago i posted that bearish wedge of ETH, but that it seemed as if bears were failing to make it drop. Giving the impression that it would do a breakout up but at least a stop hunt before retesting the lows again. Now we can see it wasn't able to get close to the 3000 resistance zone and started dropping again. Now what doesn't make sense to me is the following: Whether it's bull or bear trend, whales are always in control of the market. So, if we are really headed to prices below 2000 (and below 30K for Bitcoin), then why didn't we see a stop hunt above 3000. A stop hunt to sell longs and/or short. Why i tend to think, maybe they want to keep the stop hunt level (3000ish) in tact, because the plan is to eventually go up and use that zone to add fuel to the breakout.
So higher time frame, except for wicks, the range seems to be 2100 and 3000. Short term think the thick black line on the left might determine if this short term suppressing of the price might be done as well and could be headed towards the 3000 stop hunt zone. So we have 3000/2100 and actually in the middle the 2500/600 zone.
There is a version that everything i talked about above, is all just a coincidence and has no meaning at all. That is that even the whales are panicking and are not even trying to risk to buy up the price (to sell/short higher) before making it drop even more. That is because of the China FUD and the issues with Tether. The last one i simply don't understand why they can't be transparent about what they do. They have been shady since day 1 and simply continue to act that way.
There is one more thing i want to add, because the drop since 2900 has been similar speed as the move up week ago from 1800, indicates there is a possibility for a double bottom. Just the problem i have with, getting back to 1800, would mean the green zone breaks and would also mean a daily close below that thick trendline on the right chart. So it would give too many variables, but just wanted to point it out in case we do drop back to 1800.
So, short term i think the key zone is that middle line on the left which is around 2550 at the moment. Above it bulls are in favor to attempt to break 3000, below it bears in favor to attempt to break 2100ish. At the moment it's still looking very weak, seeing small attempts to move up since yesterday even, but they get slammed down pretty fast.
Also one more note, for the day traders out there. In general, during impulse waves (big moves) it's easier to make profits. During consolidations, whales try to take the profits you made then, with countless shitty moves and tiny small breakouts on low time frames which frustrate you eventually causing you to loose even more money. So even make it so bad, that they loose everything and end up with a zero balance just before the real move starts again, then it goes without you. Try not to fall for it and save your money for the real trend moves, the easier moves. It's a common mistake that always happens during any kind of trend.
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Previous analysis:
Comment
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On the right we have a small, downward sloping inverse H&S, which are often weak. So, bull do not want to see a weak breakout, because then it could very easily come back down again.
So, need a break that looks a bit like the blue line on the left. Also because of that thick black line i talked about yesterday. We want to see it really break upwards, with the first move reaching 2600, would be a good sign. If we could see that, and eventually see it touch 2700ish as well shortly after, than i think the breakout of 3000 should just be a matter of time.
But, bulls don't get too excited, these downwards sloping IH&S, are NOT in your favor, more often than not they fail. Why i am saying we need a convincing move up.
Might also we be a bit similar about what i updated earlier today on BTC, about the daily candle. That one is also at an important stage i think. Would coincide to the levels i described in my public channel:
" Also important to watch today, so far we have not had a daily close below 34k, now again it closed above it yesterday but barely. Think today’s candle might give an answer. Close above 37.5ish should be a buy signal. Above 36k should be like neutral to slightly bullish. Below 35.5 might be bit dangerous and below 34k should be a sell signal."
Awesome analysis. Insightful as always. I particularly liked your idea regarding the 3K zone being used as a stop hunt.
botje11
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@RTurner090, thank you, would be nice to see it play out :)
BigFrenchChicken
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Does anyone know FOR SURE if the MMs have real-time access to aggregate short information at the exchange level? Feels like being short on the weekends is a license for someone to come in and push the price of ETH up JUST enough to liquidate my short (this morning from 2376 to 2420) and then it craps out. I think they are pushing until they see that number decrease, but I might be a little paranoid here. Seems like they are spending a lot to get me to liquidate, but I am tired of seeing it reverse IMMEDIATELY after I am liquidated.
BusinessBeyond
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@OraCloudPlusInc, not sure about your 1st question..but botje11 Did say stay away from the consolidation bc of that very reason..
As far as your being short comment, Last weekend shot down to 1700 ish... And then right backup.. That was the move that you should have gotten ..buys only after that quick sell-off.
...right now just wait for break from consolidation.
BigFrenchChicken
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@BusinessBeyond, good point. i went short in ETH consolidation now because BTC got denied at the downtrend which started at 5/10. short max position now.waiting to see BTC at bottom of the triangle (see image) -
majormajor
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@OraCloudPlusInc, you are paranoid, market doesn't care about your position. they might have access to an aggregate information about positions but IMO that could direct the movements in terms of hours if not days, i.e. bigger plays. if 2% move liquidates you, you're playing this game wrong man. don't risk more than 2-4% on a single trade
BigFrenchChicken
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@majormajor, sounds right (on both counts...). Stop losses not 2-4%. Set based on ATR +20 bps usually. I probably phrased it incorrectly.
maniacmark
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@OraCloudPlusInc, I feel the same way sometimes. I feel like my random SL get hit perfectly in both directions, and then it reverses. Very frustrating. I feel like even if I use a random SL it gets picked off perfectly and the reverses.
gwops3201
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This bleeding is very bad for longs. And for those who bought at around 30k BTC dip, too. Keep or divest and realize a small profit/loss is now the key concern. More the market will go south, more break-evens will be crossed. And for the final, a guillotine will ax the undecided.
botje11
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@gwops3201, That is the danger indeed, why i rather not see 30/27k break, because it could be devastating