Now before moving forward I want you to look at my previous analysis which was completely based on and geopolitics, and carefully read what I've written, here ive suggested a theory based on fundamentals and political factors, i’ve said that,
“recently S&P500 has made it's ath around 2950 and lots of investors are taking advantage of this rally and cashing out their profits, why? if you look at current situation of geopolitics you'll see the US-China trade war and tensions between US & Iran both of this situation has put the markets under heavy pressure and fear, fear of a war in middle east and ongoing trade war with China.
so which must be the best asset for this freshly released money from stock markets? clearly Bitcoin , three imp reasons, undervalued, high liquidity and massive growth potential due to limited supply. obviously gold , silver and other precious metals are also good option, but Bitcoin is Bitcoin .
now am not saying that this is the major reason of bitcoin's rally, that's my own hypothesis, but this could be a major reason most likely. now for a minute if we assume that above theory is the major cause than this rally is the result of fear in stock markets. that means big money which is cashing out could be wrong, and i think probably this rally will end up like a bull trap and we'll see another major low in future, i'll explain it but first don't assume that i am on Bitcoin definitely not, actually most of the analysts including me will tell you that the next major bull run inBitcoin has started and it confirmed after prices broke and hold 6450 level, and am 60% sure on this, but now we're looking on other side of coin.
this rally in bitcoin could fail if stock markets keep moving forward which mostly depends on geopolitics and policies of trump administrations. now I personally think that Donald Trump won't take decisions which are not in favor of markets and economy, coz he had already said earlier that, "war in middle east was a big fat mistake", i think Trump is putting pressure on China and Iran, so he can make better deal with his own terms. you'll get this point if you read the book "The Art of The Deal" by Donald J Trump. if you read this book you'll see that Donald trump likes to create leverage, he likes to have psychological advantage over his opponent.”
Now things doesn't happened as i’ve thought but the results are same as predicted. Donald trump is now on backfoot on tensions with iran and trade war with china, and he’s doing the best in favor of economy and markets, that’s the reason that investors are getting confident towards markets and all the markets S&P500 , Nasdaq and DOW are marching towards their new All Time High, and this could be the major cause of flowing money back to stocks from crypto and a major correction in Bitcoin .
Now moving towards the chart as you can see that we’re forming the rally with lower lows lower highs in 1h chart a major formation of trend reversal or a downtrend, with a consolidation that could result a false breakout.
We are also getting higher highs with lower prices, indication for a hidden divergence.
Meanwhile key level to watch here is fib236 in weekly chart which is around 11375, if prices breaks and hold this level atleast for a weekly candle, than this complete narrative will change towards the side.
Most likely we’ll now get in the beginning of wave Y which could lead the prices to a severe crash, even below 10k level. Getting short from here is bit risky, but this could be definitely a contrarian signal. If you’ll look at the crowd outside there, you’ll find that most of the people are towards bitcoin , and there’s a heavy imbalance between the of bitcoin , coz prices raised meteorically +330% in just 6 months, and now supply has exceeded the demand and am saying this by looking at bitcoin’s daily transactions which are around 400,000 transactions per day, equal to dec 2017 when Bitcoin created it's all time high. Also with the fear and greed index of Bitcoin , now the sentiments are shifting towards fear, which means lots of short sellers who bought bitcoin above 10000 or 11000 will now start to short.
So if you align all this facts in one line, you’ll see that a huge drop could strike the market anytime, but have a psychological stop loss in a situation of failure.
Short #XBTUSD with 5-10x of leverage from 11700 - 12000