Crypto & Market Makers: how trends always reverse!
The total crypto cap just fell out its rising wedge which means the market is in for a correction! Like I said at the start of the week, there were too many green days stringed together in cryptoland; which only means one thing: a correction is coming!
Be aware of the market maker!
Now let's have a conversation! We just came out of an insane run to the upside which many people believed Bitcoin (and alts) would go straight to the moon! Let me tell you something: the chance of such a scenario is zero. Why? Because (like I said) these markets are MADE by market MAKERS. If they let cryptoland run only run up without any retraces or corrections; they lose money. Are they in this business to lose money? No, they are not. They are not some sort of charity organization, quite frankly the opposite. This means that every time you buy or (even worse) place a leverage trade; they are on the opposite side of your trade. That means for them to make money, they need to bring the market to the opposite direction of where you think / want the market to go. Like I said earlier this week; BTC longs are at all time high; that means Bitcoin can never go the moon, impossible. Why? Because the market maker would lose money and guess what? They never lose money because they have enough liquidity to compete with Elon Musk, Bill Gates and George Soros at the same damn time.
How market makers always win.
So how do they work? Very simple: they use price action to trigger your emotions; equivalent to: Bitcoin to the moon or Bitcoin to zero. They run price in any of those directions, get traders committed to a move and before they know it reverse the trend in the opposite direction to bag THEIR profit. This what they do over and over and over again - and as longs as people act like people - they will win this game over and over again.
How to trade with leverage
So whats next? Well, first off; the market is likely to hit the liquidity box as seen on the chart. This is because the liquidity is there. What is liquidity? Liquidity are people's stops or liquidation points. Market makers will hunt those areas and that's why I never put a stop loss (in loss!) but monitor my trades in real time and close them when they are about to turn against me; like my last ETH trade. To be profitable with leverage you run a sum zero risk game, when in profit; trail your trade with a stop loss in profit or manually close it as soon as there are even just the slightest indications of price turning against you. Like I say in my bio: you do not hunt for maximum profit; you trade for maximum consistency of profitable trades, even if its just a couple procent. That said, if you want to be consistent in profit without staring at charts all day? You buy fundamentally strong coins at bear markets lows or DCA during bearish times, then you hodl until you see bull market mania. That's where you DCA OUT OF THE MARKET and wait for a bearish trend. Rinse, repeat. In general, only trade with money you can lose and never, never, never, ever sell a hodl portfolio at a loss. My own first chunk of a Bitcoin was bought in 2017, missed out on the top and hodled throughout the whole bear market and was sold at 64K 4 years later. (Why I sold there you can see with the analysis I made of April 14 linked below)
The state of the current crypto market
For the long term the crypto market is very bullish! There is no doubt in my mind about that. However we need to have a close look at how this mini bear market turns out. The runup of last week was unlike other runups with the RSI clearly breaking out of the bearish trend on the daily timeframe. However; the weekly and monthly time frame are still waiting for a confirmed bullish reversal. This is why I said at the beginning of the week that if you missed out on this latest move, accept that you missed out and sit on your hands. I have to admit that I missed it too as I'm trying to enjoy summer a bit after a winter full of trading. What I did do is hedge my risk; which means that deployed 20% of my stable coins into coins that I deem to be underpriced and I have 80% still waiting for the bottom of the current correction or possible the bottom of the bear market. Now, I will have some drawdown on that 20% of my portfolio in the coming week or two; that is likely but it is not a problem as I am 100% sure that those coins will at least 2x my buy in price in the coming year or (at worst) two years.
Support zones to consider
There are a few key support zones to consider; first the bullish support zone at the golden pocket. Staying around or above these levels for another week will most definitely lead us into more bullish action. Secondly; there is the liquidity zone; the preferred zone to take the market for the market makers; this is the most likely support zone. Thirdly we have a bearish support zone below that; even there we have a bullish scenario if we hold support at the bullish trendline. However if we break into the box or below our lowest low (dotted line) we might very well be in for more pain! Lets see what the weekend and the coming week bring us... Good luck to you all and trade safe!
IMPORTANT: this is not financial advice, trade or invest based on your own risk and research.
Be aware of the market maker!
Now let's have a conversation! We just came out of an insane run to the upside which many people believed Bitcoin (and alts) would go straight to the moon! Let me tell you something: the chance of such a scenario is zero. Why? Because (like I said) these markets are MADE by market MAKERS. If they let cryptoland run only run up without any retraces or corrections; they lose money. Are they in this business to lose money? No, they are not. They are not some sort of charity organization, quite frankly the opposite. This means that every time you buy or (even worse) place a leverage trade; they are on the opposite side of your trade. That means for them to make money, they need to bring the market to the opposite direction of where you think / want the market to go. Like I said earlier this week; BTC longs are at all time high; that means Bitcoin can never go the moon, impossible. Why? Because the market maker would lose money and guess what? They never lose money because they have enough liquidity to compete with Elon Musk, Bill Gates and George Soros at the same damn time.
How market makers always win.
So how do they work? Very simple: they use price action to trigger your emotions; equivalent to: Bitcoin to the moon or Bitcoin to zero. They run price in any of those directions, get traders committed to a move and before they know it reverse the trend in the opposite direction to bag THEIR profit. This what they do over and over and over again - and as longs as people act like people - they will win this game over and over again.
How to trade with leverage
So whats next? Well, first off; the market is likely to hit the liquidity box as seen on the chart. This is because the liquidity is there. What is liquidity? Liquidity are people's stops or liquidation points. Market makers will hunt those areas and that's why I never put a stop loss (in loss!) but monitor my trades in real time and close them when they are about to turn against me; like my last ETH trade. To be profitable with leverage you run a sum zero risk game, when in profit; trail your trade with a stop loss in profit or manually close it as soon as there are even just the slightest indications of price turning against you. Like I say in my bio: you do not hunt for maximum profit; you trade for maximum consistency of profitable trades, even if its just a couple procent. That said, if you want to be consistent in profit without staring at charts all day? You buy fundamentally strong coins at bear markets lows or DCA during bearish times, then you hodl until you see bull market mania. That's where you DCA OUT OF THE MARKET and wait for a bearish trend. Rinse, repeat. In general, only trade with money you can lose and never, never, never, ever sell a hodl portfolio at a loss. My own first chunk of a Bitcoin was bought in 2017, missed out on the top and hodled throughout the whole bear market and was sold at 64K 4 years later. (Why I sold there you can see with the analysis I made of April 14 linked below)
The state of the current crypto market
For the long term the crypto market is very bullish! There is no doubt in my mind about that. However we need to have a close look at how this mini bear market turns out. The runup of last week was unlike other runups with the RSI clearly breaking out of the bearish trend on the daily timeframe. However; the weekly and monthly time frame are still waiting for a confirmed bullish reversal. This is why I said at the beginning of the week that if you missed out on this latest move, accept that you missed out and sit on your hands. I have to admit that I missed it too as I'm trying to enjoy summer a bit after a winter full of trading. What I did do is hedge my risk; which means that deployed 20% of my stable coins into coins that I deem to be underpriced and I have 80% still waiting for the bottom of the current correction or possible the bottom of the bear market. Now, I will have some drawdown on that 20% of my portfolio in the coming week or two; that is likely but it is not a problem as I am 100% sure that those coins will at least 2x my buy in price in the coming year or (at worst) two years.
Support zones to consider
There are a few key support zones to consider; first the bullish support zone at the golden pocket. Staying around or above these levels for another week will most definitely lead us into more bullish action. Secondly; there is the liquidity zone; the preferred zone to take the market for the market makers; this is the most likely support zone. Thirdly we have a bearish support zone below that; even there we have a bullish scenario if we hold support at the bullish trendline. However if we break into the box or below our lowest low (dotted line) we might very well be in for more pain! Lets see what the weekend and the coming week bring us... Good luck to you all and trade safe!
IMPORTANT: this is not financial advice, trade or invest based on your own risk and research.
Comment:
IMPORTANT UPDATE: Binance Futures will be halted in some countries in Europe due to regulatory pressure. Now if you understand what that means for the Binance market makers; it means they have "too much" inventory when these markets drop out. The crazy run up we have just seen might be an answer to that, meaning they pump prices; short squeeze and get rid of a part of their inventory at higher prices before bringing the market back down. Notice how the news exactly coincides with the top the current run. Nothing is a coincidence... Side note: support this analysis with a like so more people get informed about how these markets work! Thanks and have a good weekend! :)
Comment:
Wedge broke out on top: relief rally confirmed, full market reversal when BTC holds above 50K. I averaged in on more alts. Update tomorrow, happy weekend!
Comment:
Given the breakout the market is likely to gravitate towards the 1.618 extension around the 1.8T usd. Again, we should see a retrace before going there — However; we made a new support zone that is around the 1.0 extension and the top red box on the chart. Lets see what next trading week brings us. We’re looking bullish.
Comment:
Healthy correction incoming: support zones are at 1.6T and 1.5T - lets see if those hold.
Comment:
A bit outdated analysis, we held 1.5/1.6tn as you know. We are having difficulties with staying above 2tn. I believe we can take out this level within the coming week, lets do this!
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