BTC Cycle Bottom - Bearish Liquidation Scenario Considerations
Hi All,
I thought I would do a quick post this Sunday night I have been meaning to do for the last week or so to cover the bearish scenarios and max possible bearish scenarios I think may be possible for BTC current thinking is proven incorrect.
My current thought process for a potential new cycle bottom for BTC follows my reasoning in the below charts. Will be fun to see how wrong or right this is as we track close to activating the CBI (Cycle Bottom Indicator).
https://www.tradingview.com/chart/BTCUSD/cyNuWFBy-Cycle-Bottom-Indicator-CBI-Log-Chart-Historic-Bottom-Analy/
https://www.tradingview.com/chart/BTCUSD/PragSxLa-Cycle-Bottom-Indicator-CBI-Log-Chart-UPDATE-03-FED-0-75/
The above providing invalid with the LOG support lines and we do not hold the 300W SMA levels; the risk in the market as I see it for Btc is with the significant leveraged positions whales will find it hard to resist not to target.
See some FUD on this topic below.
fortune.com/2022/06/16/crypto-crash-hedge-fund-three-arrows-capital-insolvency-rumors-novogratz/
If liquidation levels are hit, I do expect volatility and may see some COVID / may 2021 price action volatility.
This would provide an amazing opportunity for Whales (and the like) to scope up some BTC at high volumes and low slippage on exchanges.
However, such volatilities will make it hard to know at what price range the next accumulation range will sit over the short run.
For this scenario, BTC will be historically in uncharted waters in terms of where it has been on many metrics in terms of over sold. We have no other inputs at these low levels to go by other the confluence of TA and market structure.
The chart in this post looks at market structure, Order Block Support over the Daily (Blue), Weekly (Orange) and Monthly (Orange), and Fixed Range Volume Profile (FRVP) from the COVID bottom, Cycle bottom and our 2017 ATH (All Time High) , and the FIB from the COVID bottom to our Cycle ATH (on the log chart settings for price).
I have done this analysis on the BINANCE BTC UTC chart as this has very good volume representation of the market.
Key Confluence levels which may hold up as support in a liquidation panic dump are shown in Navy Blue
* ~USD$19,798.68 MARKET STRUCTURE SUPORT
* ~USD$16,474.49 MARKET STRUCTURE SUPORT
* ~USD$13,670 MARKET STRUCTURE SUPORT
* ~USD$11,820 MARKET STRUCTURE SUPORT
* ~USD$9,157 MAX PAIN - (CME GAP bottom 9630 to 9,157) - MARKET STRUCTURE SUPORT
MAX PAIN levels would close the CME GAP at the ~$9,630 levels. GAP Boys from 2020 may finally be happy if big money can push markets down to these levels (would be a crazy ride).
See below chart for a supporting post explaining CME BTC Futures GAPS
https://www.tradingview.com/chart/BTC1!/jUTzrWDH-CME-Future-GAP/
NOTE: FRVP represents the volume of traded BTC for the horizontal price over the selected range. The longer the gray bar, the more volume traded at that price level over the selected range. Price generally respect levels of high FRVP.
I thought I would do a quick post this Sunday night I have been meaning to do for the last week or so to cover the bearish scenarios and max possible bearish scenarios I think may be possible for BTC current thinking is proven incorrect.
My current thought process for a potential new cycle bottom for BTC follows my reasoning in the below charts. Will be fun to see how wrong or right this is as we track close to activating the CBI (Cycle Bottom Indicator).
https://www.tradingview.com/chart/BTCUSD/cyNuWFBy-Cycle-Bottom-Indicator-CBI-Log-Chart-Historic-Bottom-Analy/
https://www.tradingview.com/chart/BTCUSD/PragSxLa-Cycle-Bottom-Indicator-CBI-Log-Chart-UPDATE-03-FED-0-75/
The above providing invalid with the LOG support lines and we do not hold the 300W SMA levels; the risk in the market as I see it for Btc is with the significant leveraged positions whales will find it hard to resist not to target.
See some FUD on this topic below.
fortune.com/2022/06/16/crypto-crash-hedge-fund-three-arrows-capital-insolvency-rumors-novogratz/
If liquidation levels are hit, I do expect volatility and may see some COVID / may 2021 price action volatility.
This would provide an amazing opportunity for Whales (and the like) to scope up some BTC at high volumes and low slippage on exchanges.
However, such volatilities will make it hard to know at what price range the next accumulation range will sit over the short run.
For this scenario, BTC will be historically in uncharted waters in terms of where it has been on many metrics in terms of over sold. We have no other inputs at these low levels to go by other the confluence of TA and market structure.
The chart in this post looks at market structure, Order Block Support over the Daily (Blue), Weekly (Orange) and Monthly (Orange), and Fixed Range Volume Profile (FRVP) from the COVID bottom, Cycle bottom and our 2017 ATH (All Time High) , and the FIB from the COVID bottom to our Cycle ATH (on the log chart settings for price).
I have done this analysis on the BINANCE BTC UTC chart as this has very good volume representation of the market.
Key Confluence levels which may hold up as support in a liquidation panic dump are shown in Navy Blue
* ~USD$19,798.68 MARKET STRUCTURE SUPORT
* ~USD$16,474.49 MARKET STRUCTURE SUPORT
* ~USD$13,670 MARKET STRUCTURE SUPORT
* ~USD$11,820 MARKET STRUCTURE SUPORT
* ~USD$9,157 MAX PAIN - (CME GAP bottom 9630 to 9,157) - MARKET STRUCTURE SUPORT
MAX PAIN levels would close the CME GAP at the ~$9,630 levels. GAP Boys from 2020 may finally be happy if big money can push markets down to these levels (would be a crazy ride).
See below chart for a supporting post explaining CME BTC Futures GAPS
https://www.tradingview.com/chart/BTC1!/jUTzrWDH-CME-Future-GAP/
NOTE: FRVP represents the volume of traded BTC for the horizontal price over the selected range. The longer the gray bar, the more volume traded at that price level over the selected range. Price generally respect levels of high FRVP.
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