Bitcoin making a double Double top, part 3
Updated
I am going to continue the updates here now.
So again the funding played a big part here, dropping hour before it ends and then just going up again. Longs are paying at Bitmex past 2 weeks or so and the price of this funding has been increasing as well past days. So it is becoming expensive to just hold on to long positions.
Anyway, the 3950 broke and as mentioned in the previous updates, it didn't feel like a normal reaction to the break of that support level. Selling volume increased a bit, but it was nothing big. This is usually a sign in favor of the bulls this time, that when a level breaks and instead of seeing follow through it holds just goes up again.
Because of this, it seems like we got a channel now as we can see on the left. You could see it as a bull flag as well, but i personally rather just see it as a channel. Because the volume since the 7500 low does not really convince me of this being a bull flag. Think the 8020/40 is still a level for the bulls to break.
So i think below the 8040 bears are slightly in favor. Between 8040-8150 it's neutral zone and above 8150ish we can say bulls are in favor again.
There is just a lot of noise past week, with patterns changing it's shape and then moving opposite way. Support and resistance levels that get touched many times, then eventually break just to see that it's meaningless again. It is what it is and all we can do is watch how it changes and try to pick up signs along the way. All we can say is, that volume plays a big role now. Each drop when we see sell volume being nothing big, we simply move back up again.
Will try to update when i see something meaningful. Just know that 8200 and 8400ish are big levels and probably the triangle support around 7700 and the previous low around 7500.
If you want to be aware of my thoughts, read the previous analysis as well:
So again the funding played a big part here, dropping hour before it ends and then just going up again. Longs are paying at Bitmex past 2 weeks or so and the price of this funding has been increasing as well past days. So it is becoming expensive to just hold on to long positions.
Anyway, the 3950 broke and as mentioned in the previous updates, it didn't feel like a normal reaction to the break of that support level. Selling volume increased a bit, but it was nothing big. This is usually a sign in favor of the bulls this time, that when a level breaks and instead of seeing follow through it holds just goes up again.
Because of this, it seems like we got a channel now as we can see on the left. You could see it as a bull flag as well, but i personally rather just see it as a channel. Because the volume since the 7500 low does not really convince me of this being a bull flag. Think the 8020/40 is still a level for the bulls to break.
So i think below the 8040 bears are slightly in favor. Between 8040-8150 it's neutral zone and above 8150ish we can say bulls are in favor again.
There is just a lot of noise past week, with patterns changing it's shape and then moving opposite way. Support and resistance levels that get touched many times, then eventually break just to see that it's meaningless again. It is what it is and all we can do is watch how it changes and try to pick up signs along the way. All we can say is, that volume plays a big role now. Each drop when we see sell volume being nothing big, we simply move back up again.
Will try to update when i see something meaningful. Just know that 8200 and 8400ish are big levels and probably the triangle support around 7700 and the previous low around 7500.
If you want to be aware of my thoughts, read the previous analysis as well:
Note
Wow, what a move. Big volume and open intrest on Bitmex did not even drop, saying there has been a lot of buying going on with this squeeze. Usually OI drops a lot giving a rally less value. This is the kind of break one should see from a real triangle. It has a target of around 9500. We almost touched 8900, so it could of course make a drop during this squeeze. Think for the breakout to stay real, staying above 8550 would be best. Think 8450ish should be the real max. It seems anything is possible with Bitcoin, but it already made quite the pump, so would be logical to think it might stay in this range for at least a couple of hours, somewhere between 8500/9000.
I did not think we would see a big strong move like this so soon. The OI that didn't drop got me a bit confused here. Usually it drops a lot with big moves like this. Were stops get triggered and profit taking orders on the other side which causes OI to drop. But since it didn't drop it can mean 2 things:
- The closing shorts bought up a lot of new short orders. Than OI doesn't change.
- A lot of new buys went in the market during this squeeze. So these buys increased OI again while closing shorts decreased them but now they balanced each other.
The first version, could mean it's a very big trap, forced by people who are able to do it. If this was a 300/500 point move, those odds would be 30/40%. With a move like this, 900 points, it's more like 10/20%. Just very unlikely, but it's Bitcoin.
The second version, would at first thought mean a very bullish strong market. That a lot of new buyers are simply willing to get in at these prices. These normally means that they are willing to buy even higher prices.
We have a small support now at 8660, then the 8550 and 8450. The higher the low goes, the higher a next push might go. A sign will be to see what alts will do coming hours i think. Something to watch
Just amazing to see how, where we were 2/3 months ago and the market sentiment and where we are now. Almost like it never happened, like a small bump in the road.
Note
Alts have been growing the past hour with a sideways Bitcoin. This is usually a bullish sign, something i have not seen often past 9 months. Bitcoin can still form a bull flag here the coming hours. If alts remain stable and grow some in the meanwhile, it could mean we will see some more coming week. A few days ago i showed a chart of some alts, saying that for the market to become really strong and being able to rally, we need a strong volume rally straight through all those resistances. Half already did and the other half is on it's way. If we see the others follow through as well, than i can't think of any good reason to think that we don't continue coming days. Bitcoin support levels are still as the previous update, with 8600ish being an important one now. Neckline for a small double top. I can't think of any resistances at this point :)
Funding for ETH for the second round is at 0.55%, it has even increased the past half hour. This is seriously insane, never seen it this high! In theory, if you would do 100x at current price and 20 hours later we are at the same price, you would get liquidated. For Bitcoin it's at 0.375%, a level that was last seen maybe a year ago. So for these people using high leverage, a slow continuation of the a rally will become very expensive
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