BTC/USD: Technical Outlook, Edition #15 (07/06/21)
Bitcoin nears its twentieth day of consolidating inside a triangle-like pennant, ranging around the mid-30K USD zone.
There have been many fake-out (false breakout) attempts throughout this consolidation. Before we go any further, here's a simplified walkthrough of how fake-outs occur:
Lure in and trap liquidity on either end (i.e. long, short)
When volatility picks up - SQUEEZE
Clear positions before the next move
The result?
Market participant's stops are engaged, causing a domino effect of mass liquidations
Coordinated FUD (Fear, Uncertainty, Doubt) can exacerbate the already precarious position of over-leveraged traders. This pessimistic sentiment can act as the catalyst for inflaming market volatility to new levels.
When mapping out the next random walk the BTC/USD decides to embark on, it is essential to consider the plausible possibilities. So let's explore them below, starting with the highest time frame and finishing with the lowest:
1W:
However unlikely this gigantic bearish head and shoulders may be, it may still occur if the bulls' defence fails at the USD 30K neckline.
1D:
One can see the symmetrical wedge forming on the daily (D1) charts. Nevertheless, aside from the 4-hourly (H4) fake-outs, the pennant still looks neutral and intact.
A break to the upside would offer the bulls an opportunity to push BTC/USD as far as USD 46K, where many trapped buyers are waiting to get out at breakeven. Conversely, the bears will have the chance to swipe BTC/USD down to sub-USD 30K, or lower, should the macro 0.5 fib retracement level break down at USD 34K.
H4:
The H4 BTC/USD chart above is a little trickier to decipher. However, a comparison identifies some resemblance to Wyckoff Accumulation and Distribution Schematics - with Type 2 Accumulation or Distribution appearing to be the more synchronised of the four most-likely variations.
See you again for future analysis.
- q
There have been many fake-out (false breakout) attempts throughout this consolidation. Before we go any further, here's a simplified walkthrough of how fake-outs occur:
Lure in and trap liquidity on either end (i.e. long, short)
When volatility picks up - SQUEEZE
Clear positions before the next move
The result?
Market participant's stops are engaged, causing a domino effect of mass liquidations
Coordinated FUD (Fear, Uncertainty, Doubt) can exacerbate the already precarious position of over-leveraged traders. This pessimistic sentiment can act as the catalyst for inflaming market volatility to new levels.
When mapping out the next random walk the BTC/USD decides to embark on, it is essential to consider the plausible possibilities. So let's explore them below, starting with the highest time frame and finishing with the lowest:
1W:
However unlikely this gigantic bearish head and shoulders may be, it may still occur if the bulls' defence fails at the USD 30K neckline.
1D:
One can see the symmetrical wedge forming on the daily (D1) charts. Nevertheless, aside from the 4-hourly (H4) fake-outs, the pennant still looks neutral and intact.
A break to the upside would offer the bulls an opportunity to push BTC/USD as far as USD 46K, where many trapped buyers are waiting to get out at breakeven. Conversely, the bears will have the chance to swipe BTC/USD down to sub-USD 30K, or lower, should the macro 0.5 fib retracement level break down at USD 34K.
H4:
The H4 BTC/USD chart above is a little trickier to decipher. However, a comparison identifies some resemblance to Wyckoff Accumulation and Distribution Schematics - with Type 2 Accumulation or Distribution appearing to be the more synchronised of the four most-likely variations.
See you again for future analysis.
- q
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.
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.