Bitcoins Big Bears Shakeout Part 2, solving the puzzle. Update

Updated

I am going to keep it short this time. So far Bitcoin is having some trouble with the heavy resistance at 9000/9200. But what's not in favor of the bulls as well, there still has not been a healthy correction.We need to see if buyers are willing to buy it at a higher low and push it back up again, instead of everyone getting bearish again if would would drop to 7500/7000 within a few days. That moment the market must show it's hand to give confidence the bear market could be really over. Now it's still to much FOMO and that's just not sustainable for very long.

Alt's have been very strong lately, but some of them are showing some top formation's as well. But i have to say, we saw these formations in November/December as well and price just kept pushing higher and higher. But sentiment was extremely bullish than and the crypto hype engine was at it's ATH. I don't think people dare to HODL with big amounts like they did in 2017. I think everyone with serious money has his/her finger on the sell button in case prices start to drop again.

IMO this has to change for the market to start get real confidence again and people are willing to catch the price at each higher low. That's why i keep saying, that making a correction is more bullish than making rallies like this that eventually fail (like we have seen many times in the last few months).

I have a short position on Bitcoin again, after the first one failed yesterday. Price jumps are slowing down, price is hesitating around a big resistance level. But we need to see a serious drop below the 8600/8500 to be able to say that a correctional phase will start. So far it has made a lower low on the short time frame, but it's still close to the high. So if we keep staying above the 8750 the next 24 hours, than chances increase allot that Bulls will push it through that big resistance. If we do drop today, we could see that H&S getting a real form.

Don't forget to like if you appreciate what i am doing :) Good luck trading

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This bear flag suggest a drop towards that blue circle. But we have seen these small bear flags getting break outs on the upside. If price stays below that red area now, than we will probably see that drop towards the 8650

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And there was that small breakout on the upside again.Indicating there is still bulls waiting to get in this market at this stage. It has not broken the low time frame down trend. You can see that in this picture, but it's not very meaningful on this time frame. It's at the break out level of that triangle it dropped out of. This could act as a resistance now. So far it is STILL hanging around the highs as i mentioned before, so far a bullish signs.

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When we zoom out a bit we can see a some fractals as well.

Besides that, what i mean with hanging around the highs, would translate itself into in upwards triangle. Price is no in the safe zone yet.Also hanging above that support trend line. Same one as in the primary chart.

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This picture has been causing some doubts about what the price might do. It's not the most reliable H&S, but so far it is still following it. Now we are in a ascending triangle, which could push Bitcoin higher and through that heavy resistance at 9000/9200. But we have not seen a pullback yet to that green support area. So it could also drop out of it, test the 8200/8400 again than gain strength to push higher

But what just keeps spinning in my mind, until 2 weeks ago, Bitcoin was just so extremely weak for quite some time. Was not able to make normal upwards correction after a big drop. And now all of a sudden it almost seems like Bitcoin has never been this strong and seems unstoppable. It just doesn't add up for me and causing allot of doubts

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I was thinking about posting this trade on BCH, the rising wedge it made. But i just did not trust it this time. since it has broke it on the upside, something crypto's used to do allot in 2017 as well. For me it's a sign of FOMO, so not a great fundament for the long term, but we have seen in the past that it just can keep on going up for a very long time

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When you look at those purple area's, it's a clear signs this market is not ready to go down yet. At least it's showing enough buyers are still ready to get in at these high prices. I think it's FOMO of unexperienced traders, can't believe it's smart money. But FOMO of retail money can also go a very long way.

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If Bitcoin stays above the 8800ish, i think a break of the 9000/9200 will maybe even happen todayIt's just still to strong. It showed a small signs of weakness yesterday, but bulls have turned that around very quickly

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If the 8800 doesn’t hold, we could see a drop towards the 8600

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So price is testing the support of that triangle now. It is in a small bearish pattern (Lower highs, blue circle). This could be easily broken, because the higher time frame has more weight. If it breaks out of this formation and gets above the 8950 again, than chances increase that it will break the 9050. So far it is just sideways action as usual. I miss those days that price would move up 1000 points and drop 1000 points in 24 hours :)
So higher time frame is bullish, lower time frame is slightly bearish now

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I have answered a few comments here, i think it's worthwhile to post it here as well:

hamidikia.ali
7 hours ago
botje11 Do you still have your short open? What is most likely after a possible spike to 9200ish ?

botje11
just now
@hamidikia.ali, Yes i have and why? Not because i want to short it now, no it was my plan since the 6K's to short it around these levels IF we would get there. It would be a more emotional decision NOT to short it now because how sentiment has changed lately. My stop is close and of course i am ready to adjust it, but this 9000/9200 is the perfect level to short it. If you would ask me back at 6500 what my ideal short entry point would be, it would be around 8800/9200. And i would probably say i would build up a very big position. My position is small now because i am not blind to what is going one. Alts are making big moves and showing FOMO. But what does confirm my suspicion about why this rally could still be a big bull trap, is the big rally on BCH. It was on of the biggest advertisement story for Crypto's a few month ago, sometimes even bigger than Bitcoin it self. Now they are just doing the same thing again, trying to ignite the hype engine of crypto's again. But it's impossible to say ho high we can go with bullish momentum being this high. Do i have doubts, of course i have, that's why having a plan upfront is important so you don't get caught up in the emotions of this market.

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And:

proficy
8 hours ago
I think it's more a lack of professional sellers (see BTCUSDSHORTS) than retail FOMO, google trends doesn't shoz a big spike for retail, they will probably re-enter around 13k level when BTC hits the news again.

botje11
15 minutes ago
proficy, If you ask me, the big players who were pushing Bitcoin to the 6K's and accumulated there and initiated the big rally are leaving the market as it is now. Probably unloading parts at the 8200 a week ago and now some at the 9000. Probably because they know sentiment has changed completely and retail money will just keep on buying.

I just can't wrap my mind around the fact, that BTC was so extremely weak the past month and all of a sudden its almost stronger than ever before. It just has to be (like you mention as well) the lack of professional sellers (whales). There was allot of selling pressure the past month, that many upwards corrections just got sold off too quickly AND in those days i mentioned there was just no buying power at all. And all of sudden things have turned around like people are growing money on their backs and are starting to buy again.

Up until a 2 months ago, i could see allot of fighting between bears and bulls. I mean real big buyers and sellers at certain points. Bears pushing price down 300 points in half an hour and than bulls taking over again and pushing it 500 points up again within an hour. These kind of fights and moves are history. Price movement is just to controlled if you ask me. If you would scroll back the past month on the 5 min chart. You will see an extreme amount of strange spikes to both ways. Like we have here now at the 9000, every attempt is getting sold, not with the intension to push the price down, but like it's to early to go higher. I wish it was public information, like whales who have short positions on the german stocks, they have to show their positions every day. If this information would be public, than we could see what kind of games are being played.

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This could be it, bulls bought the price up very quickly after that small drop, looks like a small bull flag so i think they will make another attempt to break the 9000. I have closed my position for even money and i will stay flat for now.

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Bulls are going for it, lets see if this attempt will succeed

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And there is the break out

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This trend line is showing some resistance now

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I have opened another (small) short position with a close stop around 9450, the move from 9100 to 9350 seems to look like a rising wedge so it's worth the risk to do it here

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And Bulls just keep on buying, so what I though looked like a wedge, no just seems like a rising bull flag, seen that before as well. Eventually it will drop out of it, but it can keep on going as much as they want. The same happened after the rally 2 weeks ago, when it rallied to the 8450 and than dropped out of it

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So a flash crash of 200 points but Bulls are not gone pushing at back 100 points. Still think we will see another small wave down, usually does after a rally like this and the first leg down.

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We are not there yet of course, but the greed/FOMO of this market is almost starting to remind me of the period of half year ago. So I am almost ready to flush my medium term outlook through the toilet :). Every little drop is just getting bought, showing the FOMO of this market.

It would mean that the operation the whales who bought everything up in the 6K, have a bigger plan in mind than I anticipated. Its not easy going against sentiment and it has worked out very good several times, but there are also times that one can be wrong and that it just has no use to fight, better to go along with it. But like i said, we are not there yet, above the 10k will probably change my mind

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Bitcoin just keeps on going, like we never had a bear market :). Looks like price has been moving in a small parabolic move up since the breakout of the 9000.It just fell out of the smaller one, but still room left in the bigger one. If bulls can keep it above 9400/9450 than we will probably see this rally continue.

But i believe for the first time since we broke out of the 6K levels, alts are dropping a bit in combination that Bitcoin itself is going up. I don't know the meaning of this yet, but i believe there is one.

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Since we had such a strong rally after the breakout of the 9000 triangle, of which the target has been reached already, i think we can assume that bulls will try to reach the target of that inverse H&S as well, around 10.500. The one i showed yesterday. I am not fighting this rally anymore, i am not a bull but i wont fight it anymore. There is one great factor anyway, volatility has returned slightly which will provide nice trades again and does not give the necessity to figure out the puzzle anymore. Since this rally from the 6500 has been so strong, i think that even if it's a bull trap, and i would miss my short entry point, that the market will make another attempt to go higher. Just like the 11.600 2 months ago, something similar/ Meaning i don't expect to see a V shaped top.

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And for the ones who have send me PM messages, sorry for the late response, i just can't keep up anymore.

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So there was was something slightly different going one this time. Looks like an H&S now with a target around 8700. But the neckline is not broken yet, so in a strong market as this, it could fail. But i don't think so, it's time for a healthy correction

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I think this right should could turn into a bear flag, so it will probably get extended some more. . But i am just so happy and exited that we have some volatility back again :)

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This rally 3 months ago had the same problem we have had now. Big rally up without making a decent correction. What happens, that WHEN it starts to drop, you start to see one H&S popping up after the other. Just like we had here. Now the question for is, are we at the circled area or already at the high.

This is not a fractal, so i am not saying we will drop to 8000 than back to 9800 and than a big crash again. I am just saying this to show what can happen if price rallies without healthy corrections

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So no bear flag and just dropped below the support already. It's not like this is a big crash already, but this is what happens when price just gets pumped without solid corrections which can make support levels. Not the first support i see is 9000 of course. It should be a very strong support. But the H&S suggests a drop towards 8700

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I will try to post a new analysis later today, but again, this volatility makes me so happy again :)

That sick theory of mine, is still in play here. Still not ready to say what it is, because it's still a small correction from the 6500/9700. So not really meaningful yet, but it is a start

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Dropped below the neckline already AND below that trend line as well. It has already made a retracement so in theory it could start to drop from further from here. But i think it's to fast. I think the green area will show some support for the next few hours. Bitcoin does not always follow the rules of TA patterns, especially when volatility is high, so it could retrace back to around 9400ish again. So lets see if we still have buyers who are willing to buy at these prices

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I have not checked many ALts, but a follower told me about IOTA and now is see XRP as well, having a big spike down. This was happening as well around November or December at Bitfinex. This is just stealing people's money, just normal traders who have small leverage position (max 3.3 at Bitfinex), who get pushed out by some smart guys who most probably have inside information on which coins have allot of stops piled up. And what can we do about it? Absolutely nothing!! Whales and exchanges just can keep on doing whatever they want. Almost seems like nobody seems to care, because i have never read a news article about this. Only year ago with that flash crash of ETH. Maybe i am seeing it wrong, maybe we should count our selves lucky that it has been almost half year ago the last time this happened. Maybe we should thank the crypto exchanges, maybe we should even send them a present to show our appreciation that they only do these things a few times each year. Yeah, yeah i think we should thank them yes

The last time i saw this, it happened with allot of coins than, i was very VERY angry. I did not have a position in any them, but i just can't stand it when people are cheating and stealing other peoples money like this. I can't even explain how angry i can get because of these things. Because it's the people who already have their pockets filled with cash, but it's just never enough. Just so typical for this world, just one of the things that needs to be taken out of this market, before we can see real confidence, real growth. Sorry about this, it just frustrates me to my bones.

botje11

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