July 5th BTC Update - Bearish Scenario
Updated
Although MS looks like it has been confirmed to be bearish the overwhelming sentiment to the downside can be expected to be squeezed. I am weary of a move to the upside in order to continue building a short position. However, in the consolidation pattern, we have experienced over the past couple of days the bears look quite in control. Therefore, I am ready for a shallow retracement reversal with these shallow zones identified with the red boxes.
It is important to note that the bulls could take this for a ride and squeeze the bears quite hard. I believe this could reach the 9600 level but with a possible extension to the 0.618 level at 9826. Anything past that would start flipping my bearish bias and be an invalidation.
These are unprecedented times with much correlation to the traditional market and world politics, therefore, be cautious and please use proper risk management.
It is important to note that the bulls could take this for a ride and squeeze the bears quite hard. I believe this could reach the 9600 level but with a possible extension to the 0.618 level at 9826. Anything past that would start flipping my bearish bias and be an invalidation.
These are unprecedented times with much correlation to the traditional market and world politics, therefore, be cautious and please use proper risk management.
Comment
Perfect rejection off the top channel trendline. 2/3 primary bearish zones have been reached. Volume from the bulls is currently quite lacking so the pump doesn't seem to have momentum. Could be forming an inverted hammer so could be a top or continuation. I have begun building my position looking for movement higher using the recommended SL for risk management calculation.Comment
Comment
The 3rd bearish control zone was tapped beautifully. So far it looks like price is rejecting hard off the strongest of the control zones. Although these are the primary bearish control zones (with a few major levels still slightly above) this would be a logical place for a reversal - therefore I have outlined potential targets (yellow horizontals) and a possible bullish scenario if they want to take this higher.Trade active
As mentioned yesterday my initial short entries have been triggered so this trade is now active. Still looking to DCA if price moves higher. Today we are so for printing a relatively bearish looking candle with a perfect rejection off the 0.382 bullish fib level. However, the bulls don't look too strong as they have been lacking in the volume department. If bulls want to push this higher I am expecting a test of at least the 0.5 level with a possible retest of the broken-through trendline before continuation higher. Even if price action is bullish in the near future price would only break local volume/trendline resistance and enter very bearish fib levels - therefore even if price goes up a reversal will still be in the cards. From a bearish perspective if BTC breaks down from here the yellow dotted lines are potential targets. Comment
With a bullish 12 hr closure following the rejection off the bullish 0.382 level I am expecting a retest of trendline resistance with possible extensions into the next bearish control zone outlined in a red box. Careful for wick hunts to that level or higher. Will be DCAing at each of the red outlined levels (these are the 3 other entries I was talking about). Comment
As warned the price has pumped into and through the earlier identified area. I successfully DCAed my order here and still have 2 more entries planned higher. For now, that next entry is targeting the 9630 regions (red box). Although candle sticks are looking bullish the bulls still provide to show volume (although it's up a bit - still doesn't compare to the spikes of the bearish volume of recent). However, we are about to close over volume resistance so an extension to the next area of volume resistance is possible. However, since there is no much bullish volume it is important to look at the bulls targets where they will likely cashout and add to the selling pressure. The primary target zones have been past but the exponential targets are beginning to come in close proximity - and these are even more reliable target zones (outlined in purple %s) - So these are possible pivots as well. Comment
Taking a closer look BTC it is starting to look a little top-y. Stochastics have begun flashing a cross and hidden bearish divergence is at play on the RSI and Stochastics. However, we are above volume resistance so it would be easy for a manipulated pump higher to squeeze high leveraged shorts even more - so the previous critical levels are still valid. However, I have adjusted my 4th entry zone and made it a bit wider as this could end up being a big wick to the topside as strong bearish control zones are crossed and longs start taking profit at exponential targets. Comment
We were able to successfully call the local top using our oscillators. We put in a very bearish candle followed by a hammer with no top, these candles brought us below the 21,55,100 EMAs on the 12Hr which provides more confluence for a bearish takeover. Furthermore, comparing the bearish volume of the dump to the recent pump we had makes it obvious that the bears seem to have more control at the moment (but this can change very fast). Although it is still important to mention that we are still above the bullish 0.618 level - which as you can see - provided a rejection and put a floor under this dump. So until we break through all these bullish barriers I am still cautiously bearish. Moving forward I would expect a bit of a relief rally from the current level as we put in 2 bearish candles without much upside movement - so a little corrective move to relieve some pressure would be healthy. Although I will not be making any more entries unless we break above 9400 I will still be outlining critical levels to watch for, each break would give the bulls a little more control, but can also act as higher risk entries for a short. The first area to watch is the 9300 region again as that is where the trendline resistance is along with a decent amount of volume resistance and the 38.2% profit level, just above this is the 100SMA on the 12HR - I have a feeling price could wick to either of these levels with the possibility of extension to the 50%.
To the downside, the first area of interest is the bottom trendline which aligns nicely with wick bottoms from recent price action.
Comment
As warned price experienced a bit of a relief rally right back up to the predicted zone, so although we experienced an uptrend it wasn't unpredicted and no reason to panic yet. Signs are still looking relatively bearish with oscillators still arguing bearish along with a serious lack of volume from the bulls compared to the bears. Price is sitting right below a number of bearish control zones between entry zones and take profits a lot of pressure is in the 9300-9500 region. However, as traders, it is always important to consider both biases. The candle pattern is an engulfing bullish candle (weak volume confirmation), and price action was able to close above MA resistance (which is now support), and there is still some room to the upside to about 9400. Comment
Late last night I ended up closing 50% of my position on a bounce to the 55EMA. For impromptu exits like these make sure to follow my twitter. In the screenshot above I present a bullish and bearish case and since the bulls gained some talking points over the weekend I wanted to secure at least some profit and be in a better position in case I need to DCA. Although my bias is still bearish there is a possibility of another take to the upside before downside continuation (but it can also dump from here hence keeping the other 50% in case). My main concern comes from traditional markets as despite a worsening COVID situation in the USA stocks continue pumping but could be reversed at any point (I have an interesting conspiracy regarding this - I might post it on twitter so check that out). Make sure to comment with any questions! Comment
Despite the bullish concern - today's close shows that the bears look like they are back in control. Although it would be nice to have the other 50% of my position I don't regret it as it was the safest thing to do. Moving forward we closed below all bearish control zones and now are looking below at bullish key levels to break in order to reach the target area of around 8900. These 2 circled areas are those of immediate concern. Comment
The struggle between bulls and bears continues raging. Yesterday's dragonfly wick followed by today's bullish close is a technical indicator of a bottom therefore some bullish concern is warranted. The question is how volatile of a move. It is possible there is another smaller take to the upside into one of the indicated yellow boxes but could also reach beyond. If this bottom causes the Stochs to cross to the upside then there is a potential hidden bullish divergence. My bias is still bearish but with a bullish concern. Since I am only holding 50% of my initial position my risk management allows me to hold the position. 
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