$BTC To Have One More Fall To End The Month *Smart Money Theory**SMT = Smart Money Theory = everything you think that is not retail related to trading. First, SMT does not believe that triangles, wedges, trendlines, channels, harmonics, etc. has any effect on how price reacts. The second is to recognize that the price is not random, it is set by an algorithm controlled by those that control the asset. The Third thing to remember is price will move toward Liquidity and Balance. That's the basics. The rest is very unique in the vocabulary you need to have and the concepts that wrap around these ideas.
Currently, the price is sitting atop the weekly fair value gap. A fair value gap is an imbalance that price seeks out. They act as magnets and can also act as opposite magnets when price enters a fair value gap, they can repel almost instantly. This goes for any time frame, find these fair value gaps and mark them and see how price reacts to them. (fair value gap is the gap that is left in a three candle succession where the candles do not touch. heres's the weekly fair value gap on chart:)
Sitting below that we have a Daily Bullish Breaker within the weekly fair value gap. Breaskers are a number 1 attraction to price especially if the are sitting inside a larger fair value gap. This is the picture of the main chart. This has convinved me that the price will have another fall to the breaker. It may be rejected as soon as it hits the breaker. Also you have to watch for the median of the breaker or the median of the fair value gap as price could reach either of those to fulfill its seeking of imbalance. (Here's the 4 hour chart depicting each median. I use a fib and mark the 50% lin of each of the Breaker and Weekly Fair Value Gap.
It could possibly reach the low of the breaker which is why my stop loss is just past the breaker to give some room as I have seen price stab through the breakers. Worst case scenario is that it fills the weekly fair value gap but that is highly unlikely. There is a probability. I just personally dont think It will do it. Although Bitcoin did hit the Monthly fair valu gaps 3 months in a row (May, June and July) (Here's the link depicting the monthly fair value gaps being filled as well as the August candle filling the void between April and June fair value gap
So there's the probability but is it likely in this situation? I think not because the monthly candles have already balanced and a fair value gap will not form between September to November. Am I planning on catching a falling knife. Yes. Does that mean you should? That is up to you. If fact. I'll probably lead with small amount in that opening price, and add to it iof it does go down and hit the medians. If it leaves the breaker, I'll be out with my stop loss, but then look for another long at the bottom of the fair value gap.
Why do I have my take profit where it is? Well if we hit a daily Breaker (also known as a PD Array) then on the opposite end you look for the smaller time frame to form your exit. So Daily Entrance 4 hour exit. If it was the weekly Entrance, then I'd be looking for a daily exit. Get the drift og how we look for entrances and exits? So the exit is the median of the 4 hour Fair value gap going the opposite direction.
EDIT* There is a little bit of imbalance between September and November. That line is at 52944.96. Once the price falls into the breaker, that line will be crossed and the monthly candles will then be balanced. This just gives me another reason as to why it could and will fall And I believe it will happen this month. And bounce around the beginning of December so December forms a little bit of a wick.
I hope this was informative as to how smart money is perceived and how it is different than the train of thought that is retail theory. We'll just have to wait and see if this happens. I think of how the weekly candles form, the monthly candles, the daily candles, and it's apparent we're ending November on a red candle in BTC. But the price has balanced on the monthly so now I'm thinking about the weekly moving into December and the month of December should be a green candle. with a little bit of a wick. So what better way to depict that than to show how this might play out over the next two weeks. These are my thoughts and my thoughts only.
Mentored by Inner Circle Trader, who mentors us in Forex and Indices Futures, he hates crypto but his ideas apply to all markets so I am applying them here. I'll have to sign off with his signature sign off.
Good Luck and Good Trading :)
COINBASE:BTCUSD
