Bitcoin / US Dollar Perpetual Inverse Swap ContractBitMEX
Description
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We are at a key point in history. Anyone believing we're not in or very close to the ultimate apex of this major cycle is suffering from bull hysteria, and should be careful. That being said, anyone believing this is going to be a market collapse situation are suffering from bear hysteria, and should be careful as well.
In my previous post I called the risk of a Bump and Run Reversal at 5.9k-6.2k. As it stands now, we have some major indicators that show our dip here at $6,150 may not be a simple dip to $5,850 before rocket train to $6,800 like many people are thinking.
This morning's $500 spike was some of the largest volume in history. It was more volume than the $500 jump from $5,100, and more volume than any of the wave of $4,900 to $5,900 last week. This is a good thing, because volume shows real buying pressure. But it's also a bad thing, because price is parabolic and volume is parabolic, and to sustain this price, volume has to remain high in a situation where we fundamentally have lost a lot of people who have gone broke during Bitcoin's previous corrective cycles and the pain of altcoins.
In 2 weeks, Bitcoin has seen $1,500+ in gains. That means that there are a lot of coins that have been accumulated as inventory by the large players, which have yet to be released back to the retail traders that make all of the mistakes and are the source of all of the profit.
This is especially true in our current pattern at a new ATH.
There has been a lot of accumulation and not very much distribution, as evidenced by WWV. OBV is down compared to price action and Willy peaked at a very high point. We are effectively in a double top pattern, and although those are often reversed with Bitcoin, sometimes they do not reverse until violently dumped.
I now believe that there is a very high chance we will see the level of dump described in my previous post before proceeding upward to the final stage. Right now there are so many longs holding exposed positions that funding on Mex is still 0.375%/8 hours. Finex has had 3k BTC worth of longs added to the books in the last 24 hours. There are so many people praying to the moon, that it's impossible to get to the moon, but easy to crash through the cloud.
Our first 15 minute red candle was a $157 drop on Mex swap and a $200 drop on Futures. This is a major crack to the run up and we may be entering an icy corrective weekend where bull mania produces a heavy hangover.
Comment
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6 hours later we've yet to move up. It looks like retail traders have been the ones buying, while the large investors have not looked to buy out the walls and move to the next stage.
Not a bullish indicator and a lot of the overbought and momentum indicators are turning... dark... on longer time frames.
Careful trading friends!
Trade closed manually
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NA morning led to walls being bought pushing the price to 6.2k. Was possible wash trading on Finex. Volume and momentum was not sustained and price dumped.
Worth noting is it was a large volume dump that brought us to 5.9k and was heavily defended with 200+ BTC market buys. We descended through the channel and bounced back into the bottom of it.
Based on this action I would now be concerned about holding a short at this level. If 5900 was defended and 6k was regained, then I believe the waters must be moving northernly even if we were to dip to 5700-5800 in the interim.
If price breaks out firmly above 6200, buy it and wait for a better chance to short.
Will can you briefly explain your charts and indicators and what they mean? I thin your analysis is brilliant, and is true, i just to confirm some things. For example the 3 indicators you have on your chat, what aare you those? and would less distribution than accumalation imply? thaanks
Right now I feel like we're in a very very over-extended situation in Bitcoin. I do expect it to reach 7-8k before this finally really goes "bubble", but I don't think we're going to do it so soon after reading $6,000 that people should be longing the top of the run Bitcoin has had this year.
Less distribution means all those coins bought during the pump have yet to be sold. All that volume to sustain the price where we're at is hard to sustain. What goes up, must come down.