Bitcoin Short is Paying Off! Are you bullish or bearish?
Next targets for BTC — $9100 then $8925
Happy Thursday, welcome to today’s Bitcoin analysis.
Bitcoin continues to show weakness as of this writing, putting in lower lows and challenging the 9200 area. From the four-hour timeframe, I’m looking for a close below 9281 or so as a key level to signal further bullish momentum. If BTC closes below that, I expect the price to reach the low of this week at 9100 and then 8925 near the SR level mapped out by the channel as seen in the chart below.
In yesterday’s morning analysis video, I revealed how I believe hedge funds and institutions are net short the BTC CME futures compared to traders with much smaller positions in the market. Check that out if you want a better understanding of the chart below.
Open interest has continued to climb while non-commercials, which are hedge funds and larger players in the market, have increased their short exposure. What it means when open interest goes up and the price is going down, that could mean there are new short positions entering the order flow.
As was explained in my previous analysis, the daily chart for BTC shows a spike in volume not at the break of resistance, but before resistance, which to me is a bad sign for bulls. This is a sign that there are ample sellers waiting near that resistance level of about 10,050. Sellers are getting their bags filled as efficiently as they can at a specific price range. If there is a large spike in volume and the price spikes through that resistance level, I’ll be more inclined to say bears were wrong and BTC has a shot at making a higher high.
To not repeat too much of what was said in the previous analysis, and in today’s video we covered several points in response to our audience’s questions, please do check out yesterday’s video and article to see how I’ve come to these conclusions about Bitcoin’s price action and why I believe it is more toppy than bullish at these levels.
Is declining volume with increased open interest and tightening prices the way markets tell us an inflection point is coming?
Definitely, and for all the reasons covered so far. In this case, Bitcoin is forming an ascending triangle on the daily, but the fact that we’ve had eight straight weeks with no meaningful pullback of either Bitcoin or the S&P 500, a roll-over in assets across the board is overdue.
Looking at the range high of April 29 and the key low around 8407, it could be a positive sign for the bears that if they keep hammering price down, this could go down further towards the EQ of 9100 or 8925 (and by the time you read this, you’ll see that this is exactly what’s happening).
Bitcoin on the weekly timeframe
One thing I find interesting on the weekly is that the Stoch RSI is hitting overbought territory as prices begin to round downward, once again signaling a potential top. If you look at the hash ribbons indicators constricting, which is typically a sign of miner capitulation. The influx of miners selling their Bitcoin as well as Bitcoin CME futures contracts becoming net short all leads to a confluence in which price may begin to roll over (again, this is transcribed from today’s morning video, so be sure not to miss those as they come out a bit earlier than these articles).
Observing the contracts ending today, tomorrow, and the 29th on Deribit, the volume of puts is heavy in the 7500 area in the near-term, while call volume does not stand out as much as the former.
For contracts expiring the 29th of May, I expect the 8000 strike price on puts to hold a lot of weight, as well as 9000 puts. The reason I look at this is when you see a lot of size in a particular contract, it shows that there may be more interest in that strike price and provides a clue as to where prices may gravitate toward around the end of these contract periods. As we approach the end of the month, we might see some interesting volatility.
Disclaimer
Information provided by Alpha Trades, LLC is not intended to be utilized in making any financial decisions and is not a solicitation, nor recommendation to buy, hold, and/or sell a particular product, digital asset, or ICO.
Happy Thursday, welcome to today’s Bitcoin analysis.
Bitcoin continues to show weakness as of this writing, putting in lower lows and challenging the 9200 area. From the four-hour timeframe, I’m looking for a close below 9281 or so as a key level to signal further bullish momentum. If BTC closes below that, I expect the price to reach the low of this week at 9100 and then 8925 near the SR level mapped out by the channel as seen in the chart below.
In yesterday’s morning analysis video, I revealed how I believe hedge funds and institutions are net short the BTC CME futures compared to traders with much smaller positions in the market. Check that out if you want a better understanding of the chart below.
Open interest has continued to climb while non-commercials, which are hedge funds and larger players in the market, have increased their short exposure. What it means when open interest goes up and the price is going down, that could mean there are new short positions entering the order flow.
As was explained in my previous analysis, the daily chart for BTC shows a spike in volume not at the break of resistance, but before resistance, which to me is a bad sign for bulls. This is a sign that there are ample sellers waiting near that resistance level of about 10,050. Sellers are getting their bags filled as efficiently as they can at a specific price range. If there is a large spike in volume and the price spikes through that resistance level, I’ll be more inclined to say bears were wrong and BTC has a shot at making a higher high.
To not repeat too much of what was said in the previous analysis, and in today’s video we covered several points in response to our audience’s questions, please do check out yesterday’s video and article to see how I’ve come to these conclusions about Bitcoin’s price action and why I believe it is more toppy than bullish at these levels.
Is declining volume with increased open interest and tightening prices the way markets tell us an inflection point is coming?
Definitely, and for all the reasons covered so far. In this case, Bitcoin is forming an ascending triangle on the daily, but the fact that we’ve had eight straight weeks with no meaningful pullback of either Bitcoin or the S&P 500, a roll-over in assets across the board is overdue.
Looking at the range high of April 29 and the key low around 8407, it could be a positive sign for the bears that if they keep hammering price down, this could go down further towards the EQ of 9100 or 8925 (and by the time you read this, you’ll see that this is exactly what’s happening).
Bitcoin on the weekly timeframe
One thing I find interesting on the weekly is that the Stoch RSI is hitting overbought territory as prices begin to round downward, once again signaling a potential top. If you look at the hash ribbons indicators constricting, which is typically a sign of miner capitulation. The influx of miners selling their Bitcoin as well as Bitcoin CME futures contracts becoming net short all leads to a confluence in which price may begin to roll over (again, this is transcribed from today’s morning video, so be sure not to miss those as they come out a bit earlier than these articles).
Observing the contracts ending today, tomorrow, and the 29th on Deribit, the volume of puts is heavy in the 7500 area in the near-term, while call volume does not stand out as much as the former.
For contracts expiring the 29th of May, I expect the 8000 strike price on puts to hold a lot of weight, as well as 9000 puts. The reason I look at this is when you see a lot of size in a particular contract, it shows that there may be more interest in that strike price and provides a clue as to where prices may gravitate toward around the end of these contract periods. As we approach the end of the month, we might see some interesting volatility.
Disclaimer
Information provided by Alpha Trades, LLC is not intended to be utilized in making any financial decisions and is not a solicitation, nor recommendation to buy, hold, and/or sell a particular product, digital asset, or ICO.
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