Bitcoin: The Big Short
Over the past few days, we have seen a massive sell-off from the $8,000 region all the day down to 6.5k which is a level I have awaited for months. Currently, the market looks very bearish and we are sitting on high time frame support.
I am expecting us to rally into ~7.7k region relatively (black line), and ultimately back above 8k to the red box area. If we do get a strong bounce there, I would consider being completely short hedged and anticipating at least one more leg down to the green zone which is between $5,700 - $6,100. In my view, that region is not a bad area to enter a low leveraged long, holding for 6 months or more.
It is possible that we go into the mid to low 5k region (anything lower than 4.8k would surprise me). I view a 3k double bottom as less likely than a 5k reversal, but to account for that scenario I marked the red line as the line of capitulation.
If we break below there with volume , things will get very ugly, very quickly. No analysis or absolute "bottom calling", just analyzing the chart as I see it at the moment based off HTF support/resistance levels.
Until then, my view is summarized as such:
- Bounce from mid 6ks to high 7ks
- Choppy consolidation
- Eventual move up to 8-8.5k (ideally)
- Final move down to lows not seen since May of this year
No time frame analysis, this is all macro speculation. For me to be bullish , I would have to see a HTF S/R flip of the black line at $7,777 and strong bullish continuation from there.
I am expecting us to rally into ~7.7k region relatively (black line), and ultimately back above 8k to the red box area. If we do get a strong bounce there, I would consider being completely short hedged and anticipating at least one more leg down to the green zone which is between $5,700 - $6,100. In my view, that region is not a bad area to enter a low leveraged long, holding for 6 months or more.
It is possible that we go into the mid to low 5k region (anything lower than 4.8k would surprise me). I view a 3k double bottom as less likely than a 5k reversal, but to account for that scenario I marked the red line as the line of capitulation.
If we break below there with volume , things will get very ugly, very quickly. No analysis or absolute "bottom calling", just analyzing the chart as I see it at the moment based off HTF support/resistance levels.
Until then, my view is summarized as such:
- Bounce from mid 6ks to high 7ks
- Choppy consolidation
- Eventual move up to 8-8.5k (ideally)
- Final move down to lows not seen since May of this year
No time frame analysis, this is all macro speculation. For me to be bullish , I would have to see a HTF S/R flip of the black line at $7,777 and strong bullish continuation from there.
Note
**UPDATE**We have finally hit my 7.7k area of interest. We are holding steady and the volume is decent. BTC looks like it wants to test 8-8.2k based on how we’ve been moving upwards with clean S/R flips on the hourly.
At this moment in time, I believe in order to go 8k+ we would need a slight retracement to cool off and take liquidity lower before a violent push above $8,000. I don’t see us holding above for long and still stand by my original idea of hedging short above 8.2k if we get there.
My secondary scenario is that we consolidate here, have a very fast sell-off lower then push higher like we did when we went from $7,700 to $7,400 and bounced back immediately.
Summary:
I think this run up has more fuel. Be prepared for a scenario where there is a massive short squeeze potentially up to 8.6-8.8k and plan accordingly. The price action feels eerily similarly to when we had a massive squeeze from 7.3k and peaked around 10.5k.
If not, I see 8.2k as the rough cap on our upside.
Note
Roughly a month and a half later, we have finally hit my area of interest. Bitcoin is showing massive buy pressure and solid volume as we hit the 8.4k region. Since we just tapped this zone, it is too early to tell if we will be rejected or continue higher. In total honesty, market structure is pointing to signs that Bitcoin has potentially bottomed and we will no longer visit sub 6.5k. We are holding the current price of $8,329 overnight and there are no large wicks or HTF bearish divergences. This leads me to believe we will see further upside potentially to $9,000+ in the near term. In my view, as long as we can hold above the yearly open at $7,163 then the BTC bottom is officially in at roughly 6.3k.
It's wild how quickly things can change.
As I said before "Be prepared for a scenario where there is a massive short squeeze potentially up to 8.6-8.8k and plan accordingly."
It looks like we may simply continue from here. Plans should always change once new information becomes known, and this is no different.
Trade closed: target reached
BTC was strongly rejected around 8.5k. As I stated, the plan for months was to hedge and wait to see what happens next. The plan was executed to a T. Was a wild ride waiting and seeing the madness unfold before going flat. I didn't rule out a move to $9,000+ but I also never planned to long that high. The red zone was enough, and this trade is another winner in the books.
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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.