Bitcoin Market Overview-- Will the Bulls Hold $9250?
Bitcoin distributes toward lower price levels as COVID second wave pressures overall markets.
Happy Wednesday, let’s do a quick Bitcoin and crypto analysis. Overnight BTC sold off, something I was expecting. Yesterday I stated that the failure of BTC to break out of the wedge as per the chart below would likely open price action for downside of the bottom of the wedge or a possible breakdown from there.
Bitcoin distribution is at play
Signs that this is truly Wyckoff distribution include volume entering at the tops of each swing upward, as well as more sheer candle spreads with expanding volume. Demand appears to be tapering off at higher price levels.
Bitcoin has been in a range for a month and a half at this point, meaning volatility is coiling up like a spring and the ultimate direction it takes should be strong and violent. My minimum target to the downside is about 6900, with deeper targets of 5900 and 4400. More difficult-to-reach targets would be 2400 and 1500, but it’s not time to discuss those levels quite yet.
As long as BTC remains inside and above the range as per the chart below (zoom in, as it’s difficult to see the levels otherwise), I will trade from level to level of support and resistance.
BTC RSI has spiked down, and is now leveling above oversold territory from the four-hour timeframe. On-balance volume (OBV) again tells us to follow the money-- inflows indicate that market sentiment is currently “I don't want to touch this.”
Order books feeling the pressure
When you see buyers step in with massive million-dollar order blocks and the price actually smashes through that wall, that's likely a bearish indicator because it implies that supply is strong. If you are accustomed to using in-depth volume profile analysis, a large empty space in between price ranges in the order books means there's no demand in that area. Once an asset breaks a wall holding it back from that empty space, just like on a raw chart where an asset may lack consolidation after a previous sharp move, chances are high that it’ll torpedo through that empty space.
What compounds sharp moves like the ones described above is that once a buy or sell wall is chewed through and can no longer support actors in the market (many who have heavily leveraged positions) are liquidated or close their positions to avoid a more prolonged bleed. This psychology creates a cascading effect, and thus a sharper move in price action.
S&P 500 futures (ES1!) is breaking its range
I stated this morning that if the S&P 500 began to break to the downside, I’d figure it would gravitate towards 2960. My projected breakout to the upside for a target of 3200 appears to be less likely since then, as the index has broken below the range.
Coronavirus news regarding a second wave of new cases in Texas, Florida, South Carolina, and Arizona, may have finally begun to impact the markets. My friends in Texas and Florida who are doctors are saying ICU bed capacity has filled up to 85%.
Disclaimer: TheAlphaTrades does not provide trading advice.
Happy Wednesday, let’s do a quick Bitcoin and crypto analysis. Overnight BTC sold off, something I was expecting. Yesterday I stated that the failure of BTC to break out of the wedge as per the chart below would likely open price action for downside of the bottom of the wedge or a possible breakdown from there.
Bitcoin distribution is at play
Signs that this is truly Wyckoff distribution include volume entering at the tops of each swing upward, as well as more sheer candle spreads with expanding volume. Demand appears to be tapering off at higher price levels.
Bitcoin has been in a range for a month and a half at this point, meaning volatility is coiling up like a spring and the ultimate direction it takes should be strong and violent. My minimum target to the downside is about 6900, with deeper targets of 5900 and 4400. More difficult-to-reach targets would be 2400 and 1500, but it’s not time to discuss those levels quite yet.
As long as BTC remains inside and above the range as per the chart below (zoom in, as it’s difficult to see the levels otherwise), I will trade from level to level of support and resistance.
BTC RSI has spiked down, and is now leveling above oversold territory from the four-hour timeframe. On-balance volume (OBV) again tells us to follow the money-- inflows indicate that market sentiment is currently “I don't want to touch this.”
Order books feeling the pressure
When you see buyers step in with massive million-dollar order blocks and the price actually smashes through that wall, that's likely a bearish indicator because it implies that supply is strong. If you are accustomed to using in-depth volume profile analysis, a large empty space in between price ranges in the order books means there's no demand in that area. Once an asset breaks a wall holding it back from that empty space, just like on a raw chart where an asset may lack consolidation after a previous sharp move, chances are high that it’ll torpedo through that empty space.
What compounds sharp moves like the ones described above is that once a buy or sell wall is chewed through and can no longer support actors in the market (many who have heavily leveraged positions) are liquidated or close their positions to avoid a more prolonged bleed. This psychology creates a cascading effect, and thus a sharper move in price action.
S&P 500 futures (ES1!) is breaking its range
I stated this morning that if the S&P 500 began to break to the downside, I’d figure it would gravitate towards 2960. My projected breakout to the upside for a target of 3200 appears to be less likely since then, as the index has broken below the range.
Coronavirus news regarding a second wave of new cases in Texas, Florida, South Carolina, and Arizona, may have finally begun to impact the markets. My friends in Texas and Florida who are doctors are saying ICU bed capacity has filled up to 85%.
Disclaimer: TheAlphaTrades does not provide trading advice.
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