BTCUSD STAMP: HOW TO PLAY HOP-SCOTCH CHANNELS: MONOPOLY EDITION
Rules of the game are simple. To advance into the next higher channel, you have to first ride the current channel down (First orange line). Now draw a card from the "community chest" pile. Woop it seems you picked the china bans bitcoin card again. Go back down one channel (First red down arrow) and ride it down for a bit (Second orange line). Just when you think it can't get worse and have no more coins to sell, you land on boardgox, forcing you to borrow coins to give to the property owner of boardgox (Second red down arrow), bumping you into the next lower channel right before you pass GO. As you pass GO, you collect enough fiat to buy back the two channels you were forced to drop with enough leftover to buy an extra channel(Green up arrow). Rinse and Repeat.
Comedy aside, the green arrows/bull runs have been hugely assisted by short squeezes from the markets being excessively bearish from high BTC swaps as both USD swaps and price trend downward. This squeeze propels the market at new relative highs without the necessary tests and retests of S&R, so we fall back down w/ some bs news so markets can properly retest and confirm or reject support.
What does that mean for the long term trend?
This repetitive channel structure is what seems to be the backbone of the downtrend, so a noticeable break in pattern would be indicative of a change in market dynamics. We’re already getting hints of a change in dynamics by the upswings (green arrows) decreasing as the relative lows previous the upswing stay more or less in the same place, implying that supply has been decreased to equal demand (exhaustion). The decrease in time of each channel move with an increase in volume shows market convergence into equilibrium, but the recent breach in the major support (the drop to 330s) was the first sign of demand being overwhelmed where in previous lows demand was able to absorb the supply.
The market needs a retest of that low(400s-300s) with evidence that demand is still in control and can continue to absorb high volume supply for us to see a bullish change in market dynamics, otherwise we continue to play hopscotch channels w/ the same downtrend pattern but without a strong support (relevant to this bubble’s price action) to anticipate. In other words, we fall till we fall no more.
TL;DR Version: We are still down trending and as they say, the trend is your friend. So we should be looking to open shorts in pullbacks for an anticipated impulsive wave further downwards. The channels themselves provide profitable trade setups for both long and short, but going long in anticipation of a substantial upswing into a new higher channel is unfavorable as the pattern is nearing its first dip (First red arrow) into the lower channel.
Strong short entry points at 480-490s w/ targets at 420s-390s as the first red arrow and 350s-300s as the second red arrow. I think it’s safe to say that 500 is now the interm resistance, so a short entry at 480s would be very favourable for R:R with a mental stop just above. How the market handles the subsequent sell offs, or the lack of, will be important in determining exhaustion, and therefore, the likelihood of a trend change in the near future.
Keeping an eye on the swaps to see how big money is being moved in relation to price. charts-bfxdata.rhcloud.com/bitfinexLiquidityPriceCombinedBTC.php Favoring a long squeeze, but it still has room to retract to the top of the current channel (480s) before it cliff dives into the lower…or it just rolls off now. :P
Enjoy!
P.S I would refrain from looking at the previous bubble as a roadmap for this bubble. All the answers you seek will become evident in the current price action. The last bubble's market dynamics did not include margin trading whereas now both demand and supply are amplified in this bubble as Margin trading has become a significant factor in these swings.
Comedy aside, the green arrows/bull runs have been hugely assisted by short squeezes from the markets being excessively bearish from high BTC swaps as both USD swaps and price trend downward. This squeeze propels the market at new relative highs without the necessary tests and retests of S&R, so we fall back down w/ some bs news so markets can properly retest and confirm or reject support.
What does that mean for the long term trend?
This repetitive channel structure is what seems to be the backbone of the downtrend, so a noticeable break in pattern would be indicative of a change in market dynamics. We’re already getting hints of a change in dynamics by the upswings (green arrows) decreasing as the relative lows previous the upswing stay more or less in the same place, implying that supply has been decreased to equal demand (exhaustion). The decrease in time of each channel move with an increase in volume shows market convergence into equilibrium, but the recent breach in the major support (the drop to 330s) was the first sign of demand being overwhelmed where in previous lows demand was able to absorb the supply.
The market needs a retest of that low(400s-300s) with evidence that demand is still in control and can continue to absorb high volume supply for us to see a bullish change in market dynamics, otherwise we continue to play hopscotch channels w/ the same downtrend pattern but without a strong support (relevant to this bubble’s price action) to anticipate. In other words, we fall till we fall no more.
TL;DR Version: We are still down trending and as they say, the trend is your friend. So we should be looking to open shorts in pullbacks for an anticipated impulsive wave further downwards. The channels themselves provide profitable trade setups for both long and short, but going long in anticipation of a substantial upswing into a new higher channel is unfavorable as the pattern is nearing its first dip (First red arrow) into the lower channel.
Strong short entry points at 480-490s w/ targets at 420s-390s as the first red arrow and 350s-300s as the second red arrow. I think it’s safe to say that 500 is now the interm resistance, so a short entry at 480s would be very favourable for R:R with a mental stop just above. How the market handles the subsequent sell offs, or the lack of, will be important in determining exhaustion, and therefore, the likelihood of a trend change in the near future.
Keeping an eye on the swaps to see how big money is being moved in relation to price. charts-bfxdata.rhcloud.com/bitfinexLiquidityPriceCombinedBTC.php Favoring a long squeeze, but it still has room to retract to the top of the current channel (480s) before it cliff dives into the lower…or it just rolls off now. :P
Enjoy!
P.S I would refrain from looking at the previous bubble as a roadmap for this bubble. All the answers you seek will become evident in the current price action. The last bubble's market dynamics did not include margin trading whereas now both demand and supply are amplified in this bubble as Margin trading has become a significant factor in these swings.
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