I Hate to Say this But the Price Action is Bad Bad News
Updated
Originally I thought this was a little too fast but felt it was a short squeeze and we'd top in the $8-10k range then have a nice correction. Unfortunately things go out of hand.
Parabolas happen all the time, in many different price /time ranges and many different assets. I've studied them for years and I got shit when I said the 20k parabola was a bad sign. I got shit when I told you the 11k run up in early 2018 was a bull trap. I now expect new lows are possible. I wasn't thinking that at all last month.
That doesn't mean I guarantee it. Coming weeks and months will help guide us.
I would have to see us hold here maybe consolidate it for a month then make a slower move to 20k.
Otherwise a move down to 7k and a reasonably long and flat consolidation area that shows signs of re-accumulation. If we have a parabolic crash, then be careful. 7k is the 61.8 fib and also a small low volatility area that would be ripe to pluck some stops, so hold that for a long period and accumulating there would change my mind. Going below that triggers your first warning.
This market really as no business ever going under 6k if its going to start a new bull. I take partial stops there on my last holdings. The rest at $4800. Under that and I'd put $1200 as a 85% chance.
Here is my concern. Markets with real buyers go up and down, chop, as buyers accumulate, then take small profits and patient buyers buy it up. Usually parabolas are much longer and start as very slow moves. When you get a burst like this its more akin to crack up boom. In other words, its just buying because price is going up. It ends when you run out of buyers.
The volatility tells me that there is no real investing behind this move. Its low liquidity nonsense fueled by overleveraged noobs. This happens all the time in OTC and we see it shitcoins constantly. Real markets with real serious buyers or institutions don't move like this. This is high margin, retail idiots and FOMO buyers that are now out of buying power and who knows how many of them just got liquidated by the pro's with an almost
4K move down. I don't think there will be enough new buyers to take it higher. Also very interesting to see all the commercial net shorts on the CME COT report with huge contango, most miners are likely well hedged.
Again... do your own research, but be damn careful.
Parabolas happen all the time, in many different price /time ranges and many different assets. I've studied them for years and I got shit when I said the 20k parabola was a bad sign. I got shit when I told you the 11k run up in early 2018 was a bull trap. I now expect new lows are possible. I wasn't thinking that at all last month.
That doesn't mean I guarantee it. Coming weeks and months will help guide us.
I would have to see us hold here maybe consolidate it for a month then make a slower move to 20k.
Otherwise a move down to 7k and a reasonably long and flat consolidation area that shows signs of re-accumulation. If we have a parabolic crash, then be careful. 7k is the 61.8 fib and also a small low volatility area that would be ripe to pluck some stops, so hold that for a long period and accumulating there would change my mind. Going below that triggers your first warning.
This market really as no business ever going under 6k if its going to start a new bull. I take partial stops there on my last holdings. The rest at $4800. Under that and I'd put $1200 as a 85% chance.
Here is my concern. Markets with real buyers go up and down, chop, as buyers accumulate, then take small profits and patient buyers buy it up. Usually parabolas are much longer and start as very slow moves. When you get a burst like this its more akin to crack up boom. In other words, its just buying because price is going up. It ends when you run out of buyers.
The volatility tells me that there is no real investing behind this move. Its low liquidity nonsense fueled by overleveraged noobs. This happens all the time in OTC and we see it shitcoins constantly. Real markets with real serious buyers or institutions don't move like this. This is high margin, retail idiots and FOMO buyers that are now out of buying power and who knows how many of them just got liquidated by the pro's with an almost
4K move down. I don't think there will be enough new buyers to take it higher. Also very interesting to see all the commercial net shorts on the CME COT report with huge contango, most miners are likely well hedged.Again... do your own research, but be damn careful.
Note
Its hard to explain trading with limited space in tradingview. After I posted this I realized the Goat was on Tone Vays show today. They both talked a lot of about how this price action sends a warning signal. You have to watch this if you don't understand. This doesn't mean it has to go lower, its just that the threat of going lower increased because of this frenzy and the lack of correction. The big moves up that never correct set up gaps where there is no support and it actually sets up commercials to hold short rather than long dips, especially with such a huge contango on the forward contracts.
Check out it as they explain it very well... and I just don't see many experienced traders that understand this concept. I feel so alone.
youtube.com/watch?v=ygRZZj5HCnE
Note
For the sake of transparent, here is my short term view.
1. As I posted I believe we have a better chance of going to new lows than what we had a month ago. That doesn't mean we can't go higher or we have to go to new lows.
2. But based on probabilities, I will short this 112K area. I expect to see this turn down and close the weekly below 11k and any daily close below yesterday's candle will confirm that.
3. Closing a 1H over $13200 or a 4H over
13K, especially if it happens in coming days is bullish and I will close this short and wait to see what happens. In other words, you don't just blindly short. You need to see price action justify the position. 4. I'm not against taking a breakout trade if I see bullish price action, but this won't be an easy trade or a large position.
Shorting parabolic moves is extremely risky (same with longing them). You need to be careful and patient. But it has great reward because you can get an elevator down once profit taking begins.
One more thing. If we do get back to
14K, very good chance we go much higher and you never short new local highs in a parabolic market.Note
Each day I evaluate this trade. Since we are coming at the end of the week and month, its critical to watch daily and weekly closes. In this chart a close that is higher than yesterday will close above the daily BB and will also signal strength. Closing higher than $12500 would still give us a good weekly candle tomorrow.
When you take a short trade on a parabola break, you want to see continuation of the downtrend. The bounce is normal and we got selling at a supply point but if it can recover that area, then it changes probability and sets up too much potential for new highs.
This is how I manage this position. I'm looking for very specific movement and if I do not get it, I will close this trade.
Note
I have fully covered my short.
This price action is telling me that the chances of a deep dive from this point are unlikely. I am buying back a lot of my spot I sold at 112K-
13K and then also looking to add back in that red box. I'll be more interested in short term longs at this point. For this idea to be correct, I want to to see big red panic candles and more impulsive movement downwards. This appears to be controlled selling. I think this might take awhile, but I'm not betting on a dump to really low levels just yet. And even if we do get it, I expect big moves up and down so I plan to trade the volatility.
Does this mean new lows won't happen? Not necessarily, but unless we get acceleration fairly soon, it becomes more likely this is just a correction and we at least have another move higher or we have a long sideways correction that that will take place over many weeks or even months.
Note
As mentioned yesterday price action just told us that this thing was at least going to bounce. I traded about 60% of this move. I actually have a short position now I'm going to look to build to $11600.
A huge $1500 move with no pullbacks was still a big surprise. A lot of people are really bullish on the move but when you try to recover from a correction, big moves like this aren't actually as bullish as a grind higher. I'd rather see it slowly move up, get back and fill for re-accumulation. Moves up like this often happen when big traders just pull their sell orders to get enough liquidity to short it again.
Thats not not always the case, but it puts me on guard. Regardless, we are at a major point where we can figure out if BTC is marching higher or ready to break down.
This $11600 area is big fib area. It's an SR area, a weekly level. To be bullish, we need to see follow through in coming days to clear this area and flip it to support. Higher daily close to day over $11600 and I get bullish and would close shorts and look to long to 16k unless we lost that level on a daily close. A move higher today would tell me that the likelihood of real buyers wanting to drive this up is high enough to try to long and avoid shorts.
market makers trapped late shorts yesterday so now we'll find out if they are trying to trap dip buyers. If they do then this will move below $9700 and if this happens quickly, I think it can get dangerous and continue to break down.
At this point, I'm 50-50 as to whether its bearish or bullish so we watch and let the market tell us what it plans to do.
Note
I posted this in the other more recent post. Its the 2017 movement which has been eerily similar. Does not mean it has to happen. Fractals eventually break but I would expecting something similar in nature.
But generally speaking to get a crash pattern we would fail around 11k in early August then go down to 7k area or possibly lower then rally up then fall sharp.
This pattern is invalidated if we can close back above $11100 on a daily and hold that support. That would increase chances of bullish case, get us back above major MA's and above major support and lead to the next wave with 20k being realistic by year end as long as we didn't close back below that support area.
Fun times for bitcoin trading. For disclosure, as a trader with no real bias I short major resistance. I shorted $10100 and was stopped and now short the $10600 block area with another sell at $10750. I won't try to add short in the zone above it. My target is $8500 and $7400 so I have a stop at $11200. If that fails, then I will look for longs.
Note
Still in a consolidation but the volatility has continued for 2 months. The short term price action looks bearish but its still 50-50 whether we break out of this triangle up or down. I still stick with my original post ideas that this type of volatility is dangerous and a lack of open interest, lack of long term buyers makes it harder to go up. At the same time I am not 100% bearish in the medium term and I'm ready to buy lower or if we break out of this consolidation and trend. The market will tell us where it wants to go.
On the bullish side we have a good consolidation without a heavy breakdown so plenty of time to re-accumulate. If can break higher and get past 112K then I think the bull continues to test all time highs.
On the bearish side, moves up to 112K have been hammered down and volatility helps the pro traders liquidate newer traders. We've spent a lot of time in the 9k area so I don't think there will be enough buyers to hold it if we can't reverse at the bottom of the triangle.
Cycles have been fairly unclear but I believe we are due for a cycle low in the next 10-15 days so a quick move down into the $7-8k range would be a buy and if we could get a fast recovery, potentially re-ignite the bull.
I will likely buy any dip but I will be really careful if any bounce starts to die.
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