Establish ultra support in the 30's, test mid 20's, or spook the market with a sub 20k bear trap.
These are the three scenarios I am considering.
Listed in order of what I see as most probable:
Sub 20k bear trap would actually make sense...as it would cause maximum panic in the market and shake out a high percentage of 2021 positions.
30k support is...
I'm not bearish and I'm not bullish
The bull market is in danger. Critical support in the mid 40k's will determine if the bull market is to continue. This mid 40k region coincides with the 21 week moving average, which is the bull trend support from past cycles. This is the 4 hour, but if those levels break on the weekly timeframe set some ammo on the sidelines...
BTC is in price discovery, with little to speculate on besides small ranges.
Meanwhile DXY has been an extremely reliable indicator for BTC, inverse correlating with BTC whenever it has large legs up or down.
In other words, BTC likes to react off moves of the US dollar. Makes sense, given the "digital gold" narrative around BTC.
DXY sits on important support...
During this bull run BTC has tended to range when traders anticipate a pullback, consolidate, then defy expectations for more upside. Expecting this again, but if it breaks below substantially we could be headed for a retest of 21 week MA.
These range charts over the past month have been very good signals for trades.
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When we were ranging between 18500-19500 most traders were calling for 13-14k, as this would have been a "healthy" retrace from a TA perspective, looking at fib levels and supports.
Now many traders are calling for 20k, which would be a completely expected retrace.
BTC is too bullish to respect these notions. My idea here is that she will once again disrespect...
BTC is forming a beautiful range, which could serve as a launch pad. If we go down, this will also be an important resistance level. BTC has an opportunity here to defy all expectations and do a quick impulse past all time highs. Let's see if the bulls have the cajones.
So far looking at the 4HR and Daily, DXY has respected measured moves. Let's see if DXY respects the measure moves on wider timeframes.
Fundamentals aside (which are bearish DXY), DXY looks compelled to move down, perhaps in dramatic fashion.
There is a money wall staring us in the face if DXY continues to behave in this way. It is called BTC.
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Last time we looked at DXY on the 4 hour using supports and measured moves, it played out perfectly. Let's see if DXY will do so again.
The measured move target coincides with a historic support. It also matches an Elliot Corrective Wave pattern, and has multiple double support levels which if broken will increase volatility to the downside and provide further...