Speculating On A Major Top (BTC)
Updated
Volume aligns with a weekly top, and there is a bearish divergence brewing. Of course, it's possible that the large sell volume is only indicative of Bitcoin moving around during the ETF launch. So, that's important to consider when assuming price will drop heavily from here.
I'm fundamentally bearish on Bitcoin, not because I don't think higher prices are out of the question. I'm bearish on it because I think it's a net negative. My stance is that only time will tell how long it takes for the market to make this realization. Obviously I've been wrong plenty of times, so this is not to be taken as fact, or as what will happen. This purely represents my opinion.
My last bearish post on Bitcoin itself made its way to the front page here. Bitcoin did drop in the short term. Then, all the posts on the front page were bearish at $38-39k, which led me to believe the drop was over in the short term. My guess was that sentiment was too bearish to drop at that level, and a big bull trap would be required. My plan was to start shorting on the bounce. Now, most of the front page is bullish.
I've averaged into a relatively low-risk short, just 1x, adding at
42K, 45k, and now 49.5k. This is with the suspicion that buyers will peter out at this level. Open Interest is skyrocketing, and it is now higher than it was the first time around at 49k.
In order to start a bearish trend, Bitcoin will need to start closing below the 9 week EMA (orange). Even the recent correction failed to close below that level on a weekly basis. So, technically speaking, Bitcoin is not in a bearish trend right now. I am merely speculating that it will be.
On the opposite side of the trade, if I'm wrong, Bitcoin has the potential to head all the way to the top of that broadening pattern and hit 100k+, disrupting the halving pattern in an interesting way.
Probably the safest bet is to not assume price will simply collapse tomorrow, because it's clearly proven resilient. But I'm here to make wild speculations, not to sound reasonable :) That's always part of the fun.
Thanks for reading!
This is clearly meant for speculative purposes, and not as financial advice.
I'm fundamentally bearish on Bitcoin, not because I don't think higher prices are out of the question. I'm bearish on it because I think it's a net negative. My stance is that only time will tell how long it takes for the market to make this realization. Obviously I've been wrong plenty of times, so this is not to be taken as fact, or as what will happen. This purely represents my opinion.
My last bearish post on Bitcoin itself made its way to the front page here. Bitcoin did drop in the short term. Then, all the posts on the front page were bearish at $38-39k, which led me to believe the drop was over in the short term. My guess was that sentiment was too bearish to drop at that level, and a big bull trap would be required. My plan was to start shorting on the bounce. Now, most of the front page is bullish.
I've averaged into a relatively low-risk short, just 1x, adding at
42K, 45k, and now 49.5k. This is with the suspicion that buyers will peter out at this level. Open Interest is skyrocketing, and it is now higher than it was the first time around at 49k. In order to start a bearish trend, Bitcoin will need to start closing below the 9 week EMA (orange). Even the recent correction failed to close below that level on a weekly basis. So, technically speaking, Bitcoin is not in a bearish trend right now. I am merely speculating that it will be.
On the opposite side of the trade, if I'm wrong, Bitcoin has the potential to head all the way to the top of that broadening pattern and hit 100k+, disrupting the halving pattern in an interesting way.
Probably the safest bet is to not assume price will simply collapse tomorrow, because it's clearly proven resilient. But I'm here to make wild speculations, not to sound reasonable :) That's always part of the fun.
Thanks for reading!
This is clearly meant for speculative purposes, and not as financial advice.
Note
Bitcoin is close to invalidating my thesis. Added to my short at 51.6K. Any meaningful push above here will invalidate the bearish trade. Right now I’m giving this until March to play out in my favor, otherwise I will take the loss. Let’s see! Momentum right now is strong in the bulls’ favor but things can shift on a dime.Note
Added again yesterday at 52k. Buyer volume is looking a bit weak. Not too many people seem to want to buy above 52k. If this support gives out, price should at least retrace to one of those trendlines, maybe around 46k. The local uptrend (green) has already been broken. Note
This is the same update I posted to another chart. But here it is! It's been some months since my last update. As we know, BTC ended up rallying after the initial ETF selloff, even though overall spot volume doesn't look great. This was against my initial speculation. Bitcoin broke its all time high by little more than 5%, which doesn't quite factor in inflation. Really, it simply touched the highs from the last cycle peak. My speculation has generally been that Bitcoin will have a hard time maintaining a new all time high, if making it there at all. I'm not quite convinced yet. However, the bullish structure remains intact. This correction makes a lot of sense - though Bitcoin was not able to make it to the upper bounds of the broadening wedge. Right now, it's getting close to the lower trendline again, which is currently near 54k. Let's see what happens! Here are a couple of scenarios.Note
I ended up closing the short for a loss around 67k. After the failure to produce a larger move upwards, I considered re-entering. I got back in around the same price - 
67K, but had the chance to add a bit at 71k.Note
I'm still short, with my highest add at 71k. After months, Bitcoin finally touched that lower trendline I was looking at. Buyers need to step in here in order to avoid heading back to 42K or lower. This is pretty much the lowest prices should go realistically if Bitcoin is to continue onwards to new highs this year. 
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.