botje11

Bitcoin Bulls Pushing Back, But Still a Big Road of Resistance

BITMEX:XBTUSD   Bitcoin / US Dollar Perpetual Inverse Swap Contract
In the previous analysis i described 3 scenario's, which covered almost every possibility from that point on, but still the market chose the road that did was different than these three ;). Anyway, we had that higher low with the small bounce up to 3400ish again, but after the bulls lost momentum i gave a small warning about testing the lows again. So the first scenario was already failing and it looked like the bearish one took over. However, we were getting closer to break the 3300 and 3250/3200 support, but there was no real follow through and no big volume selling either. So that made the bearish scenario shaky as well.

Because the bears were loosing momentum as well, because each drop was loosing selling volume and the drops were getting smaller. So we started to see a bullish wedge form which we already broke out of and still has a target around 3270. Short term momentum is on the side of the bulls now, but as soon for now they need to hold the 3210 at least.

Alts have made small breakouts as well and a few like BSV' and LTC' (check my LTC analysis) made very big jumps already. For alts and for Bitcoin' these are all still just first waves up. Without a second bigger wave, the bears will still have the upper hand. For Bitcoin' i think we need to see a break of 3400 at least to think momentum might be shifting. A break of 3600 would be a good victory for the bulls.

From the bear side, everywhere we read we can see people waiting for the 3000 levels or even slightly below it and for the bulls it was to hold the 3300/3200. Many people were eager to buy some around the 3000 level. But what if there are not enough people who want to sell the these lows and the people waiting for the 3000/2900 start to think their entries wont get reached?

I don't think it's difficult to think there are many people who shorted the lows, especially at the break of 3300 or even at 3200. If your wondering why we usually see big spikes happen after the break of a bullish wedge (or bearish ) is actually because what i mentioned above. Unless the bears can hold the 3300, i think there is a very big chance for a decent short squeeze. I can't say where this level will, my best guess is around 3300/3330 but it could be higher as well. That H&S where many people (including many of my members ) kept asking about with a target around 3000/2950, have their neckline/entry point around 3300/3350. So these traders might turn into buyers if they seen they want to close their shorts as well to prevent losses.

This is why volume is always so important, because the volume shows us that we do not only have shorts closing or bulls buying, but they show us both. Only then can one start to think a low (short/mid-term) could be set. So if you were wondering why i said earlier that we need a second wave up after this one, that is bigger than the first one, is because of this.

So for now we can say, a break of 3300ish could be in favor of the bulls and a break of 3400 might be a turn around. Anything below 3300 could still just be another failed attempt for the bulls and we could see a countermove from the bears again. The 3100ish level is a clear support now, but i don't think that if we see a decent drop again from these levels, that it will hold. I think prices below the 3K, around 2800/2900 will probably be in play then.

My members know i have been saying that i think it's time again for a big bear shake out, because the sentiment has become very bearish the past week. With this i don't mean a correction to 3600/3800, but a much bigger upwards correction. I personally thought the 3200/3250 would hold a few days ago but after that Bart move failed, things became more dangerous. After that bear flag turned out to be a triangle, so reaching the 3140 instead of the 3050, it was a small signs for a potential low. On the left we can see that channel i have been showing the past days, and as i mentioned in the previous analysis, we broke it, kept bumping against the former support and moved back in again (yellow circles). We did the exact same the second time. But this time the move up is bigger than the first attempt. Usually after traps like this we see countermoves, but the first attempt clearly failed with the rally to 3300, so it really looked as if the bears were still in full control. That's why i think the 3300ish level could already be quite significant.

OI on Bitmex has increased a lot the past 24H, almost 35 mil and around a level of 345 mil. The last time we had this level we made that drop from the 3400/3450, this time we can expect a decent move again (squeeze), but if the bulls can hold ground and break through the 3300, i think that squeeze will be a short squeeze.

So in short, i am expecting a big upwards correction around these levels soon, it could be from here on out if this attempt succeeds. For me the 3210 is already important and 3180 will make me very careful again. It's very tight, but that simply because the trend is still bearish . It is actually also funny to see, how they start a move up on Saturday night CET time. Is it a coincidence or is it intentional, to do it at exactly that time of the day and week, where most people are not trading. We have seen it happen before with big moves, but usually drops though.



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Previous analysis:

Comment: Alt coins breaking up, but as mentioned above, they need a second wave. Like LTC for example, it should make a bull flag and make another wave up to around 30. In that case it could mean this is the start of a bigger upwards correction. Or XRP to 0.33ish and ETH to 97/100.

Comment: Remember that possible Bart i mentioned a few days ago, that rejection we had at the 3500. Well this is almost the same, except that this time it's a smaller push down, but for the rest it's the same.

Each time we see a squeeze up and a move down just as fast, that shows the Bitmex bears are still in play and shorting the market with high volume. The fact it happens so fast is because they have bots doing this. What they usually do, is trigger a small squeeze up, have their shorts ready to get filled and just as fast eat up all the buys on the way down again. So filling up a big bag in a matter of minutes. The previous time it almost looked like they would fail, but they kept it below the 3500 and eventually the market turned down again. If the bulls give away the 3230/20, it will become pretty shaky already.

Comment: On the right we can see a small trend of higher highs becoming support. The bulls need to hold that trend. The Bart move i mean in the previous update, is the yellow circle on the left

Comment: It was this move

Comment: This last bounce has given hope to the bulls again, i think we will see a bigger bull flag on the higher time frame form here the coming 4/12 hours, so probably staining in the 3240/3200 range. Depending on the last bounce up, we judge if it will be a succeful bullflag or not. This potential bull flag could be more important than we think. Because if it succeeds, it could be the start of that second wave up. As I mentioned above, the 3300/3400 zone could be lots of shorts closing, in other words it could trigger a big short squeeze. It’s just a judgement, can be sure of course, I am just very sure that on bitmex we have had 40 mil in contracts that shorted below the 3200/250, so that will provide fuel. I think most of us know, at least the ones who don’t have blinders on, we had many rallies in the 2018, but they have all been short squeezes. So IMO, the complete setup is there now for this. Bulls just need to hold the 3200 today
Comment: Don’t forget to check my LTC analysis as well. If the bitcoin description above works out, this won’t need much explaining

Comment: Bulls seem to be eager already, we could just move up now as wel, i just assumed the market would enjoy its free time on Sunday and completing a basic bull flag. Anyway, if we do move up, the more dedicated bulls would appear to be
Comment: Still needs more volume than this. We can see that small inverse H&S on the right of which we just broke the neckline, but so far no follow through yet. I rather had seen that bull flag on the left get completed instead of a way that is too soon. Which is still okay, but show volume when you do.

It could also turn into a triangle here, there is decent chance for that since the bulls kept that pattern of higher lows above previous high intact.

So volume is still missing, but there are still chances.

Comment: OI on Bitmex has moved up to 370 mil, so those big buys we saw yesterday, are some whales loading up longs. But, for each long there is a short position as well. So there have been bears opening new shorts from the 3120 up to the 3260 with an amount of 60 mil. Of which most are at a loss now while the longs are in profit. So if the bulls can hold the 3220 and keep that triangle on from above in tact, it will most probably mean the bulls are getting more traction and that when the triangle breaks and we move above the 3300, we could see a big short squeeze happening.

But before bulls get too excited, bears have been very strong so far. They have already made a double top at the 3260 which will get confirmed if the 3210/200 breaks.

At least we know we are most likely going to see a big move again soon instead of the sideways action we have seen the past week.
Comment: When we zoom in, we can see bears are trying to make a small H&S. We can also see selling volume is increasing again. However, the bulls are still eating the sell orders so far. If this neckline breaks and with it the triangle as well, the bullish fun will become very shaky and could already be over.

Comment: New ETH analysis:

Comment: The double top is about to be confirmed, triggering a possible target around 3160. Looks like a rounding pattern, so there is a chance for a turn up from that level again. The bull flag is also still possible, but i am not liking the volume picture of it.

So for now we can say that we have a clear level around 3260 and for the bears probably around 3160 and otherwise the previous low at 3120.

Comment: Not likely, unless we see a quick move up to the neckline again within 1 hour with decent volume. The current low also needs to hold.
Otherwise forget it, because they have failed many times lately.
Alts are still holding, so neutral on that side. As soon as we see them dumping again, than it will probably be confirmed that the bears have taken over again. I would look at the most bullish alts from yesterday, when you see their supports break, it might give you a very good indication about the next step

Comment: Momentum seems to be shifting again towards the bears. Alts have weakened quite a bit already. Some are still okay, but there is no conviction to be seen today.
Bitcoin has also just made a lower high and just broke the 3200/190 support which was an support zone until now. OI on Mex has dropped a bit as well.

So nothing big yet, but momentum has clearly shifted from slightly bullish to neutral. But inside the bear trend it's better to say that momentum is on the side of the bears again.

The 3160ish, level i mentioned earlier, could still work as a last support. Creating a higher lower there.

Comment: New educational post on Bitcoin:

Comment: I just posted a very interesting picture in my public channel, showing the OI of Bitmex from the past few days. I can't show the picture here unfortunately. I don't have any other conclusion than accumulation has been going on there. No guarantee for a low of course. There is always some accumulation going on at lows, at bear flags, at triangles etc. It all depends on who wins the fight eventually. But this OI sticks out big time, ever since we broke the 6K
Comment: OI on Bitmex has returned to the 370 mil again the past few hours. Next to that, it looked like it was about to make a bigger drop, but instead buyers stepped in again and eat all the sell up (increase of the OI again). So far this 3180ish seems to be a good support level so far. It looks like we are moving inside of a channel now. It's mostly sideways action, which makes it very difficult to judge the next move. The bulls need to break the 3250/60 today, otherwise i think we might be testing the lows again. Alts also need to improve more as well.

Comment: Alts making jumps up with a “stable” bitcoin. Usually a very good sign. Bit bitcoin still needs to break that 3250/60 soon. And needs to make a ascending triangle between 3120/3260 Instead of a bearish wedge.

I still think we are seeing accumulation around these levels. OI keeps on rising on Bitmex at stable prices. For the first time the past 5 weeks
Comment: Looks like it has become a ascending triangle here. We also broke that channel from the previous update, also seems to be moving inside of a small bull flag as well. Looks like it could pop up soon But whatever happens, should stay above the support of the triangle
Comment:

Comments

Took a few days off from trading, and it was truly glorious! Recommend everyone else do the same for yourself. Helps you clear your mind and come back with a clear perspective. Set some alerts for price movement (I did a 10 % move on BTC), and live a little.

Brought myself up to date through your posts, David. Thanks for keeping the updates coming so frequently buddy. Must say that the price action has been interesting. We'll see where this goes.

All the best,
James
+4 Reply
botje11 jscduk12
@jscduk12, Very good, happy to hear that. Taking breaks to clear the mind should be part of the arsenal of a trader. It really helps to put things in perspective as you say as well. That way you can filter out all the noise and emotion in the market
+2 Reply
Soreko jscduk12
@jscduk12,
Great advice, James. Thanks.
Reply
Hey!
Exactly 1 year ago BTC made ATH (the all-time high) 17.12.2017, good old times :D
Currently, we are far far from it but can it climb just a little bit closer or drop more further.

Happy anniversary!
+2 Reply
Thank you for all your posts and all the updates you give on them.
+2 Reply
botje11 User236
@User236, Your welcome, hope it's helpful :)
+1 Reply
User236 botje11
@botje11, It's very helpful. You are one of the few people who's charts and texts are of real use. With all the updates it's even better. I really appreciate all of your posts and the time that goes in to that :)
+1 Reply
botje11 User236
@User236, Thank you, this kind of gratitude is of course motivating :). I am trying to to teach a bit as well, explaining my thoughts
+1 Reply
@botje11, In This bear market it is really helpful for an amateur like me to understand the market from an expert point of view . Thanks for your updates Botje .
Reply
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