BTC will chop and destroy longs and trap shorts | Areas to long?
Important Update:
On Sunday night when we saw that big drop happen, I stated in videos since that I expect chop in BTC for several days in the current range we're in. This is exactly what happened.
Why and how did I know that?
In overly extended movements, especially when traders are overwhelmingly long and leveraged, the path of most pain and least "resistance" is a violent movement in the opposite direction of the masses, i.e price drop.
Why chop around here in the $10.9k - $11.4k range...
Traders who are still long could get chopped up in this range and will prematurely long anticipating the breakout. If they don't get it soon enough, the market or their own emotions will force them to close out. Additionally, the Option Theta (time decay) for BTC Call options, meaning people thinking $12k or $13k calls for mid August or early September just had their premiums wiped out. This creates further pain for bull biased traders. Effectively, price can stay in this range and chop up most people and then eventually decide its direction later on.
BTC ranging here allows few things to happen:
1. Longs get chopped up due to ranging
2. Shorts are anticipating a breakdown but may get trapped shorting the bottom if we spike into $10.8k
3. Remember, when BTC drops and ranges, yield seeking algos and investors are rotating money into altcoins
Not financial advice
On Sunday night when we saw that big drop happen, I stated in videos since that I expect chop in BTC for several days in the current range we're in. This is exactly what happened.
Why and how did I know that?
In overly extended movements, especially when traders are overwhelmingly long and leveraged, the path of most pain and least "resistance" is a violent movement in the opposite direction of the masses, i.e price drop.
Why chop around here in the $10.9k - $11.4k range...
Traders who are still long could get chopped up in this range and will prematurely long anticipating the breakout. If they don't get it soon enough, the market or their own emotions will force them to close out. Additionally, the Option Theta (time decay) for BTC Call options, meaning people thinking $12k or $13k calls for mid August or early September just had their premiums wiped out. This creates further pain for bull biased traders. Effectively, price can stay in this range and chop up most people and then eventually decide its direction later on.
BTC ranging here allows few things to happen:
1. Longs get chopped up due to ranging
2. Shorts are anticipating a breakdown but may get trapped shorting the bottom if we spike into $10.8k
3. Remember, when BTC drops and ranges, yield seeking algos and investors are rotating money into altcoins
Not financial advice
Comment:
BTC getting rejected at VWAP. I expect a spike near $109XX - $108XX liq. area. If not, a long above $11.4k has better confirmation vs. longing here at $11.2k
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