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T-distribution

Is BTC retail being ostensibly bearish in spite of price action?It's Friday, traders, and you know what that means -- liquidity drying up for the weekend as the larger traders take a break and enjoy some down time. This means it is easier to move price with smaller sized positions, so if trading be aware of sudden movements. DXY is getting a bit of a bounce today as I mentioned it would yesterday as a result of it hitting the equilibrium of our box. It is also being supported by the S1 daily pivot. Of course this means that gold has taken a bit of a hit as a result and it is currently finding support on the daily pivot. Remember, gold has been in a descending channel since earlier this year, but it is moving sideways and nearing the resistance of that channel. A clean break should indicate a likely trend reversal. But we are here to talk about Bitcoin, and how about it? Strong move overnight as expected has price topping out at almost $6800 so far. This has price perilously close to a hotbed of over-leveraged, under-capitalized shorts. A daily candle close at/near the day's high would be extremely bullish. Price has hit overbought on the 4H, but only reached about 76 on RSI so we could see a bit more upward movement before a rest. As I mentioned yesterday and a few days before, my expectation was to see price hit this area and then pullback before pushing higher. We have RSI dropping on the 15 Minute chart as price makes slightly higher highs. OBV remains strong for now. MACD has also dropped, but watch the histogram as it is close to printing hidden bullish divergence with higher lows in price but lower lows in the oscillator. This is only the 15 minute chart, so it doesn't mean we necessarily have to target $7K on a move, but it does mean that we could see a push toward $6815/$6850 if it prints. There is also a possibility to see a sudden thrust up toward $6930 or so before a retreat toward $6650/$6700 if it does so. Failure to make those moves upward should signal a retrace to the bottom of the yellow box, or maybe even the upper horizontal red dotted line depending on how fast the drop happened, before the next potential move up. The 4H R2 pivot sits at $6847 which is inline with a move toward the $6850 area outlined above. OBV on this TF looks strong at the moment as well. MACD and RSI are bullish with the latter in overbought territory as mentioned. Ultimately, $6985 gives us the equilibrium of the green box above price as well as the descending blue dashed line which denotes the resistance of the large triangle/wedge that has been printing since February. We have had two technical breaks of this resistance so far -- July and September. A breach of this area has me looking for a target of the equilibrium of the upper blue box, where the previous run up was stopped. We have seen a 10% build up of longs since yesterday while shorts have ended up flat. This has me thinking that retail traders are being ostensibly bearish, and contrary to possible price action, which could provide fuel for a short squeeze. Again, I am not saying that it must happen, only that if it does the likely clues are making themselves known with glitter and sparkle.
BITFINEX:BTCUSD
by Chris_Inks
7
Bitcoin's CBOE shakeout. CME and ETF upcoming.Good morning, traders. CBOE Bitcoin September futures expired yesterday and, as I warned, there was comparatively large volatility within an hour of the expiration. It began with a strong drop and ended with an even stronger pop that resulted in about $400 worth of upward movement. This appears to have been a terminal shakeout on the small TF accumulation we've been watching since September 17th as shown in the 15 minute chart to the right. If so, then the current price location is the BU/LPS and we should expect price to exit the top of the TR. On the larger TF accumulation, shown in the 4H chart on the left, this move was likely a spring, as well, and the current price location is the LPS within the TR. As of this point, price has moved exactly as I outlined a few days back, but that doesn't mean it must continue to do so. Until price exits the top of the TR, traders should remain cautious. If too much supply remains, then there will have to be additional tests/LPSs before price can move beyond $6600. Remember, price is still moving sideways within the 4H TR. Shorts have dropped just the slightest bit and longs remain stable. As long as support holds at $6350-$6400, price should be preparing for a further move up. Price breaching the high from yesterday's shakeout at around $6510 is the key level to watch. If it drops below $6350, then we need to see $6200 hold in order to stay with the smaller TF TR. If price does manage to drop through that level then I will be watching for an initial bounce from around $6130. The one thing on the smaller TF that remains suspect is OBV, which has dropped. This could quite possibly be the result of the strong price movement during the shakeout and, as such, may not be an issue as the 4H TF shows OBV holding well so far. But traders should continue to watch OBV on their TFs. The 1H MACD is nearing a bearish cross, so if we don't see price move up soon, then we could see it dropping back down toward $6380. The 3D chart shows sideways movement for the past week as price nears the apex of the symmetrical triangle it is printing on the larger TF. We may not see any strong upward movement until CME expiration next week as a result. DXY is dropping this morning and, as expected, gold is rising. Emerging markets continue to grow and there appears to be a strong correlation between EM and BTC. The DJI has finally filled the gap from January and is attempting to print an upthrust (higher high through the top of the TR). At this time, my opinion is that stocks are in distribution and, if so, then we should expect downward momentum after it completes this new ATH. Many people expect Bitcoin to do very well during an economic recession, but as I have pointed out it remains a very risky asset class and during recessions money flows into less risky assets. So, if stocks are in distribution, then we will have our first real opportunity to see how the world truly views Bitcoin -- as a store of value or very risky. All this being as it is, of course we have Bakkt coming online in November (which is huge news for this market and should give it a boost). We have CME September Bitcoin futures expiration in just over a week as well as the ETF decision. Both of these have the ability to play havoc on Bitcoin's price, so traders need to remain vigilant in their trading. The SEC is expected to delay a final decision on the ETF until Q1 of next year, but with Bakkt coming online there is the distinct possibility that we could see a surprise approval prior to then.
BITSTAMP:BTCUSD
by Chris_Inks
8
Bitcoin price is printing a symmetrical triangleGood morning, traders. Today is the CBOE Bitcoin futures expiration date. Furthermore, price has been printing a symmetrical triangle since September 8th which mimics April's symmetrical triangle that resulted in the short squeeze. Shorts were at an ATH at that time and are currently near it as well. Now, much like then, retail sentiment is very bearish and the expectation is that price must go down. So, must we repeat April? No, we don't have to, but the pattern continues playing out similarly which makes it foolhardy not to pay attention. The 4H chart shows price finding support on, and then bouncing off of, the bottom of the trading range while printing a possible bullish hammer. My expectation, as I explained last night, is to see price target the top of the trading range at $6450-$6500. If price continues to follow April's pattern, then we would expect to see one more move down toward $6350 before price exits the top of the triangle and, potentially, ignites a short squeeze. However, as I said, that short squeeze doesn't have to happen just because price exits there. The price target upon breach of the upper descending resistance line of the triangle is that descending black resistance line. It is based on the widest part of the triangle. That target is also the horizontal red line that we have had on this chart for a while. The descending dotted blue line denotes the top of what everyone is calling the large descending triangle/falling wedge, but notice that we have had two technical breaks in the last couple of months. This makes me question whether that larger pattern really exists. More often then not, you have one technical break and then the price runs the other way. So, is the real pattern the triangle outlined in black that begins with the June low? OBV is nearing a break through the top of the red descending wedge it has been printing since February which would suggest strong price appreciation upcoming. Looking at OBV since September of 2017, we can see how it has been creating a rounded bottom, as expected in a correction, which it may be nearing the lowest point. Volume precedes price, so if we see OBV rising, then the expectation is that price will be following. The bottom remains speculation until it proves itself to be so, however. The 1D chart has been printing a rising OBV since August 14th as it nears the apex of its descending wedge, similar to the 4H OBV. We need to see OBV breaking the descending dotted black line before we begin getting too excited. OBV is riding the ascending dotted black support line which makes continued upward movement at the moment potentially somewhat suspect. MACD is riding very close to the signal line, just shy of a bullish cross, and is approaching the descending dotted black resistance line. A breach of this line should suggest upward momentum toward the top of the ascending triangle that has been printing since April. All this being as it is, we cannot forget that we are in a corrective cycle so there's always strong potential for continued downward movement. As such, we can see that a breakdown of the smaller symmetrical triangle that's been printing since September 17th could produce a target as low as $5940 which is on the ascending support line based off the lows on June 24th, June 29th, and August 14th. Furthermore, the much larger possible bear flag breakdown would see a target of around $5000.
BITSTAMP:BTCUSD
by Chris_Inks
BTC's accumulation in the face of bearish retail sentimentGood morning, traders. Bitcoin continues to move sideways, but for how long? Yesterday's downward movement that led to this sideways action appears to be a breakdown of a larger bear flag, which as I mentioned a few days back would have a target of around $5000. This would follow the AAPL 2009 pattern as I discussed last night, creating a spring, and if price continued to follow it then it would mark the beginning of the bull run. Obviously price does not have to drop that low as pattern targets often do not full materialize, nor does price even have to drop at all as the current area has proven to be a strong accumulation zone. However, if price begins a rapid decent, that is what I will be looking for at this time. Daily RSI is sitting at 40, so there is room for price to drop in such a manner. The 15 minute chart has been playing out as outlined last night and price has so far hit a high of $6349 which is the equilibrium of the box that sits at $6322 to $6370. Anyone watching last night knows that was my initial target at $6340/$6350. Remember, there was another possible path that included a spring around $6179, but I warned against traders thinking it was required. So, what now? We can see that price formed a symmetrical triangle, denoted in red. The target is based on the widest part of the triangle, which as you can see leads to $6400. That would put price right between the next two upper blue and red horizontal lines that I spoke of as the next targets. As I've been typing this up, price has now hit a high of $6390, which is the previous period's S1 pivot. At this time, continued movement up will have me watching the R1 pivot at $6456 and the horizontal red line above it at $6544. A move beyond that will see price targeting $6680-$6690. For those who tune into our 2x daily live streams, none of this is a surprise. There is currently little real resistance near price. A check of TensorCharts.com shows us the strongest resistance sits at $6400, but if you've been watching this morning you will have noticed that it has just moved from $6300. It's a false sell wall meant to scare buyers. If you look at the Accumulation Distribution line on, both, the 15 minute and 1D charts, you will see that it continues to rise. We have generally looked at OBV throughout this year, but I have also spoken about this other indicator a time or two. It, like OBV, tells us that accumulation is occurring rather than distribution which should signal price increasing rather than decreasing, contrary to the most bearish among us calling for long, extended trips down to $4000 and below. This could change if this indicator begins showing distribution, but until then any thoughts of that kind of move are irrational. Ultimately, we are watching the September 14th swing high of $6596 and the September 8th swing low of $6119 as the initial boundaries of this current sideways movement. Above the former or below the latter denote likely continued movement in their directions. If dropping below the swing low, then we will be watching the August 14th swing low of $5858 and June 24th swing low of $5755 to hold as support. As we can see, there is also a short ascending support line currently sitting at around $5835 that should help as well. Above price, the daily cloud looms, but notice that it things out immensely at the end of the first week and into the second week of October. This means less resistance on a possible push upward. BTCUSD shorts continue building as they near their ATH and longs appear to be attempting to build a base. DXY continues to fight to stay up, but doesn't seem to have a lot of strength at the moment as the best it can do is move sideways while continuing to dip lower. Gold continues to build its ascending triangle which would create a reversal from the downward movement. While neither of these may directly influence Bitcoin, what they do is provide a gauge of the economy and when they act in the manner that they are we have historically seen Bitcoin's price rise.
BITSTAMP:BTCUSD
by Chris_Inks
4
BTC demand v. supply and the DBWGood morning, traders. After all that movement last night, price ends up right where it started at yesterday's update. It also shows you why I mentioned that I am paying attention to the DBW the most. Price hit the top of that wedge and then dropped back down to find support on the Tenkan line on the 4H chart. As with previous times before, this area continues to print small-bodied candles and/or long wicks on the 1D chart. StochRSI on the 1W is printing a pennant at the 42/43 area suggesting possible upward price movement from where it is at within the next two weeks. I spoke last week of the strong possibility of price just moving sideways for a week or two and that is what it has been doing so far. The 15 Min chart shows price consolidating within the upper-third of the DBW suggesting a likely breakout through the top of the wedge as is expected with this pattern. That doesn't mean that price can't see another strong push toward the bottom of the wedge before it does, though. Doing so at this time would see price possibly reaching $5950. That being said, price doesn't need to drop as it has already recorded four alternating touches to support and resistance. This current ranging in the low-$6000s will continue to try the patience of traders/investors resulting in the "weak hands" selling into the composite operator if this year has been accumulation. "Smart money" is deeper into this pair than it was previously at this price level, just a few weeks ago, suggesting possible accumulation as well. Traders have been making a big deal about the MACD bearish divergences that have appeared throughout this year at the top of the rallies. The reality is that after such a large move up through the end of last year and subsequent strong drop through the beginning of February, these bearish divergences are expected until price levels out as the buy side and sell side trade against each other within a tightening range. Markets tend to return to the mean. That, alone, doesn't guarantee that price continues upward; it only serves as a reality check when people use it as a reason that price MUST go down at the moment. More importantly, traders should take notice that the 1D MACD has been printing higher lows toward the resistance at the highs in May and July, forming an ascending triangle which is a bullish pattern. Since June we have seen price print higher lows, but we do need to see a higher high as well. I am watching for MACD to breach the descending dotted black resistance line within the ascending triangle first. At this time, we can see MACD pulling closer to the signal line suggesting potential exhaustion on the sell side. 1D OBV has been printing a descending wedge, also a bullish pattern, and is nearing the convergence of the support and resistance lines, so a breakout one way or the other is near. As mentioned previously, this could take a few more weeks to play out, but the pattern breakout bias should be upward since the pattern is bullish. And an increase in OBV should lead to an increase in price afterward. I am continuing to watch for a possible SFP (swing failure pattern) at some point, potentially signalling the next bullish push up, similar to what we saw on June 29th and August 14th. This would require that price drop below the September 9th low of $6094.38 on Bitstamp but close above it in the same 1D candle. As always, failure of the June low to hold has me watching $5450 and $5250 as immediate support. Traders choosing to get involved at this level should be aware of the increased risk associated with doing so. Price is holding on support at this time, but it has been here before and as a result there is the very real possibility that price could drop through it if supply outpaces demand. There will be no live stream this morning as I am still not feeling all that well and am just getting my voice back, but I will be streaming tonight at 9 p.m. CST. I appreciate everyone's understanding.
BITSTAMP:BTCUSD
by Chris_Inks
3
Bitcoin April again, terminal shakeout, or bear winter?Good morning, traders. After that shakeout at the end of yesterday, price has not returned to our previous accumulation zone. The question now is are we going to drop further? At first glance, that certainly appears to be the most likely course of action, doesn't it? But there are a few things you should be watching just in case it does not materialize. If you caught last night's live stream, then you saw me look at the similarities between the point right before the April squeeze and our whole recent movement. I cannot take the credit for this as someone else mentioned it, but unfortunately I cannot find who it was, so if you know then go ahead and tag them below so others know. The left screen is our current movement while the right screen is April's movement. I have numbered the pattern's movements and we can see that price has acted very similar, complete with shorts reaching/nearing a new ATH. While I'm not saying this will definitely happen, as I am currently neutral on movement, what I am saying is that if you aren't watching to see if this potentially plays out, then you are adding significant risk to your trade. Notice in both instances that price retraced to the 23.6% level on a sharp drop after completing an ascending wedge. That drop landed price within the previous trading range. In the April movement, price then moved up to the 61.8% level prior to the squeeze, which is what we are watching for in the current movement. Also, as mentioned, in both instances shorts were reaching toward/creating a new ATH. Shorts are currently sitting at 38,576 while the ATH right before the April short squeeze was 40,719 - just a stone's throw away. The shorts/long ratio is now sitting at 1.4888. In both cases we have parabolic increases, but for every action there is an equal and opposite reaction (short squeeze in April). That reaction is where the potential lies to move price through the descending wedge's resistance. Again, I'm not guaranteeing this will happen or even stating that it is strongly likely to do so, only that I am watching price and if it continues to mimic this pattern then I plan to trade accordingly with appropriate risk management because even if price does as it did in April, there is no guarantee that it will complete in the same way. However, if it does then we would likely see a new higher high above $8500 and that would give us a bullish trend on a multi-month scale with a higher low and a higher high. The horizontal red lines denote expeted resistance if price pushes upward, similar to what we saw in April. Of course the other likely thing that could happen at this point is continued downward momentum. In that case, it matters to me whether or not it is hard and fast, like yesterday, or if it is more subdued. If the former, then my expectation is the completion of a terminal shakeout. As I have continued to state since June, if that happens then I am looking at $5450 and $5250 for support. I remain on the fence about a move below $5000 in such an event because the new low would be so much lower than our current low. Terminal shakeouts aren't meant to go significantly lower, in general. However, there is liquidity right below $5000 and I could see the potential for a wick down below it thereby setting off a lot of new longs that have been waiting in that area. If it is the latter, then I feel that we are more likely to continuing heading down further and experiencing a longer corrective cycle. But, as I have pointed out during the live streams, the dollar index appears ready to fall. Bitcoin has moved opposite of the dollar index in much the same way that gold has, so I give it the most weight in determining what happens with Bitcoin. My expectation is that if we see the dollar index drop then we should see Bitcoin rise. And if we see the dollar index rise, then we should see Bitcoin fall further/remain down.
BITSTAMP:BTCUSD
by Chris_Inks
8
Finally, a Bitcoin retrace! Now what?Good morning, traders. What a wake up call for those of us in the U.S. Bitcoin price drops $500 in the early morning. However, this isn't a surprise. During my recent live streams I spoke of the various gaps below and above price as well as price needing a retracement and that we would likely see $6800-$7200 depending on if price made one more push up before doing so or not. It did not, so price has fallen near the bottom of that range as expected. Many longs were liquidated in this process which helped price get here so fast, creating a motive wave. As expected, bears are now coming out of the woodwork in droves proclaiming that we are DEFINITELY going down to $4000 this time. Same song and dance. Currently we are rebounding off the bottom of my 6H box, which overlaps the top of the $6800 block and is also the daily pivot. Additionally, it is the diagonal support from the November low to February low. OBV is rising on most TFs, which is what we want to see as volume precedes price. Price has hit oversold/near oversold on TFs up to the 6H. Price also dropped quickly which means traders should be looking for bullish divergences. Price is currently finding resistance at the S4 pivot and support at the S5 pivot on the 15 minute TF. If prices closes the daily below $6865, then it will have filled the CME Bitcoin futures gap that was created by last week's close and this week's opening. The next gap down, as I have been mentioning, requires a daily close at/below $6405. If this move down is subwave 2 of Wave 3, then we should expect price to retrace into the $6241-$6645 range. The lowest end of that range is the median of the sideways chop range that price went through from August 9-24th. This would potentially fill that lower gap. If it is subwave 4 of Wave 1, then our current low is likely wave A of it, which means we go up for B, and then lower for C before heading up toward $8000 for subwave 5, unless of course we get a flat correction which means the current low is as low as we go. However subwave 4 plays out, traders should be watching for a pennant, flag, descending wedge, or descending broadening wedge to form. I'm not expecting to see a pennant form because the structure for it is not ideal, nor a H&S at this time. If the latter does form, then the top of the left shoulder is August 28/29, the head is the recent high, and the right shoulder should likely top out around $7135-$7250. If an H&S plays out, then the target should be the $6420 level. The 15 minute chart shows a possible ascending triangle forming which, if breached to the topside, should see a target of the S2 pivot around $7150. Ultimately, such a move could play out as an IHS, which would see price target $7400. An IHS requires expanding volume and candle spread as price completes the right should and breaches the neck in order to be valid. Taking a look at the Wyckoff I posted about two weeks ago on TV (www.tradingview.com), price has been following the projected movement. If it continues to do so, then we should see an overall move up toward $8200 and subsequent retrace toward the low-$7000s, followed by a strong move up toward the February high. Of course this is all speculative so traders should not be trading blindly. Trading plans, confirmation levels, and risk management are required to be successful over the long-term in financial markets. Watch for over-leveraged, under-capitalized shorts to get liquidated if price moves up quickly due to retail traders FOMOing in as price dropped earlier.
BITSTAMP:BTCUSD
by Chris_Inks
1
One more push before Bitcoin retraces? Good morning, traders. I'm trying a darker color scheme here, so let me know what you think. It is the beginning of the work week in the U.S. after the 3-day holiday weekend. Shorts jumped up over the weekend the short/long ratio currently stands at 1.1558. There are a couple of possible reasons for this: 1) big player could be baiting retail into shorting so they can initiate a short squeeze to get through the resistance at $7300-$7500, 2) an individual/entity could be playing contrarian and hoping that price dives, or 3) they are hedging their long spot position just in case price drops. As I am writing this, there was a push up to $7400, which was the equilibrium of the ascending channel, liquidating some shorts in the process. This moved price through the immediate resistance around $7330 which marked the top of the apparent ascending triangle. The target of that pattern would be the previous R3 pivot on the 6H TF at $7680. Remember, pattern targets are often not hit, so traders should never rely solely on them. It is possible that the ascending triangle was a pennant, in which case the target based on the flagpole of the pattern would be around $7900. This was the pattern I was watching earlier this weekend, but the resistance at $7330 may be suggesting the ascending triangle mentioned above. The $7340-$7350 level is showing good support for the moment with resistance from $7400-$7500, $7550, and $7580. On Bitmex, there was a sell wall of about $42 million recently at $7700, but it is now around $22.5 million. All of this means that my target of the $7600-$7900 range as the top of this leg up, that I've mentioned for a few weeks based off various patterns we've talked about, is still valid, so we will see how price action plays out. If we look at what's been going on in terms of Wyckoff, then we likely just completed another re-accumulation range. Bearish divergences are starting to show up on various TFs, however, so it becomes increasingly difficult to know if the top of this leg up is in now. If not, it does appear close at least. It seems to me that we have one more push into the zone mentioned above, but I can't guarantee anything. I have been talking about the CME Bitcoin futures gaps for a while now and Friday I mentioned the likelihood of it gapping up after the weekend which would require a retrace to fill it. At this point, price is currently filling the nearest daily gap but needs to close at $7380 or higher to do so. We then have gaps that require daily closes at/above $8415, $10,775, and $15005. Below current price, there are gaps that require a daily close below $7045, $6405, and $5885. Those lower gaps, especially the sub-$6000 one, are why I continue to mention that a shakeout is still a possibility. A sudden drop down into the $5000s would get price under that gap, and then the following daily close would fill it. There is also the possibility we could see a continued push up toward the February high around $11,800 first, and then a move down and shakeout. This latter scenario would be the most productive for a shakeout as the retail herd would be much more bullish so the sudden drop would get rid of the remaining weak hands. In this scenario, the previous low is most like a secondary test, as I've mentioned the possibility, rather than a spring, and the shakeout would be a spring. The herd is "hoping" for bullishness right now, but they aren't believing it so a shakeout right now would not be as convincing. The latter scenario has me expecting a retrace down to $6800-$7200, depending on how high price moves first, before continuing up to challenge the February high. If you've been following my live streams this year then you already know these are the scenarios I deem most likely and why. I still see little-to-no reason for any prolonged move under $5000 at this time. As always, risk management remains key. Trading without a plan will make sure you don't last long.
BITSTAMP:BTCUSD
by Chris_Inks
11
Bitcoin's double bottom hopium?Good Friday morning, traders. We saw another attempt by the market to push price up and through the $6450-$6650 resistance but the sell walls were dropped in when it did. Ultimately, we saw a high of $6562 this morning with a sharp sell off immediately afterward that led to a low of $6405. The high was at the dashed horizontal resistance line that we've had in place for over a week now. Looking at the 1H chart, we can see price generally moving between the descending dotted line and horizontal blue line with some wicks up. We are watching for a break and close above that blue line. Shorts to longs ratio has dropped to 1.15 with the overnight movement as we are seeing longs increase and shorts decrease which we pointed out was likely a few days back. A short squeeze would require strong movement up sooner rather than later, without the sell walls dropping in and limiting momentum, otherwise we may see shorts unwind. Daily RSI continues to rise, currently sitting at 43, and MACD has curled up and is nearing the signal line for a bullish cross. The latter has continued printing higher lows and highs since the corrective low in February with the most recent high being just about even with the previous one, suggesting we are seeing bullish pressure building up toward the resistance. This could be seen as a precursor to a bull market, but we will need to re-evaluate it in terms of price action once we get to that point in order to confirm it as being so. Taking a look at that daily chart shows us six days of long wicks and minimal candle bodies with price hovering around the median of the channel formed by the August 14th low and August 15th high. The current daily candle is looking much stronger, however we still have just over 10 hours remaining before it closes during which time anything can happen, especially since we are transitioning into the weekend which is usually marked with lower volume. However, a breach and close above $6630 would go a long way toward supporting the bullish hope. At this time, price remains above the S1 pivot. The daily pivot sits at $7435 and a breach of that would be a bullish signal as well. On other TFs, the 4H RSI is consolidating toward resistance at 60 and a breach would suggest upward momentum as OBV continues to rise. The 3D printed a large-wicked, small-bodied indecision candle which doesn't help much with analysis, however the current RSI is pressuring the resistance at 42. If broken, we should watch for a target of 53 as the next resistance. OBV continues to rise on that TF as well. Overall, volume has increased since the beginning of the July run which is generally a bullish signal after a corrective cycle consolidation. We should also note that price may be forming a double bottom as denoted by the blue arrows. Price needs to breach the $8500 high to confirm this pattern, but if it does, then we should be looking at a price target of $11,100-$11,200. This would give us the first true higher high and low sequence this year, further supporting a bull market narrative. But we have to see if price follows through and prints that first higher high before the potential double bottom is even relevant. None of this, in any way, guarantees anything bullish or otherwise. These are the things we are watching as potential clues to understanding the market's current condition. As always, the supports are noted in case price fails to hold this current level. We will be looking at various TFs during today's live streams as we attempt to decipher price action into the weekend. While TV does not allow me to advertise where we live stream, I am sure you will have no trouble finding us and I look forward to seeing you join into the chat. Thank you for taking a look at our analysis and be sure to hit the thumbs up.
BITSTAMP:BTCUSD
by Chris_Inks
6
Emotional retail traders and the precarious nature of shortsGood morning, traders. It is Wednesday and CBOE Bitcoin futures expire today. Will this result in a jump of price? There is a strong narrative suggesting exactly that possibility as shorts continue to rise parabolically, quickly closing in their all time high and bringing with them a shorts-to-long ratio of 1.4251 currently. This ratio hasn't been seen since November 2017 and yet shorts continue to pile on providing us with a clear view of retail trader emotional entries into the market. Watching tucsky.github.io play us the same story over and again: price jumps up, retail traders attempt to "short the top," price moves $40 higher and those positions are liquidated. Over-leveraged, under-capitalized emotional trading will get you rekt, so make sure you aren't doing the same. If you missed last night's live stream, I also took a quick look at ETH, XRP, and ETC. Overnight we saw a move up to $6483 (the lower TF pivot) before a bit of retracement. A push up through this pivot would be a bullish indicator, at least on the lower TFs and we should then expect price to target the R1 pivot. Looking at TensorCharts.com, we can see strong resistance building up at $6480, $6650, and $6700 at this time. We should see short squeezes occurring as price pushes through these levels. We have some support building around $6220 but not much else at this time. The perfect storm mentioned above has been building and the expiration of the CBOE futures today could be the catalyst that sends things into motion. We will have to wait and see. Until then, price appears to be printing a bullish pennant on the 1H chart. If it completes successfully, then we can expect an initial target of the $7000 level which is the R1 pivot, and if we are seeing that kind of price level, the bias should be continued upward momentum. Remember, a breach of $8500 prints another higher high thereby increasing the bullishness. However, we could see price contained by the $6800 block prior to reaching that target. As always, we want to watch volume and price action. Volume increasing as price rises is a strong bullish indicator which appears to be ignored lately by the emotional retail crowd expecting a drop below $5000 and subsequent repeat of 2014. While there are no guarantees in trading, I choose to give much more weight to such an agreement between volume and price action than anything else, especially right now. Daily Stoch RSI is finally making a push out of the oversold area as RSI is testing its own resistance at 42. Daily MACD has noted resistance around 430 on its last two highs, but is also printing a higher low suggesting momentum is building toward a breach of that resistance. It's my belief that if we see MACD printing a higher high, then it will suggest that we are in a bull market. The 3D MACD has printed consistent higher highs and lows since its low point around April 7th, but remains below centerline at this time. Weekly Stoch RSI is printing higher highs and lows and its MACD found its bottom, so far, during the week of July 9th. A strong weekly candle here, and potentially next week, should see a bullish cross on that TF's MACD. The 3D and weekly candles look amazing at the moment, however there is still much time left for the latter and anything can happen before it closes. But if they both close at or near their current states then it creates significant bullishness on much larger TFs and the expectation should then be a likely test of the recent high at $8500. As such, they should be watched closely. CME Bitcoin futures expire at the end of the month, so traders should be paying attention to that as well. We continue to monitor the lower levels noted on the 1H chart in case of a price drop. Realistically, I expect price to target the $6800 box and then drop down toward ~$6200 before pushing back up once more and breaching that box. However, the precarious nature of the shorts right now could catapult price through that
BITFINEX:BTCUSDEducation
by Chris_Inks
10
Retail traders begin capitulating. Is it the end or beginning?Good morning, traders. It was a rough Monday for some of you, I'm sure. Those who have been following my live streams knew yesterday was a distinct possibility and, hopefully, were prepared for it. I continue to preach the importance of risk management so that traders don't get caught when price swings opposite their anticipated direction. The question now is has price fallen enough or is there further to go? I know the most bearish among you are guaranteeing and confirming that $3K is the next stop, but that is just silly. Why? Because price doesn't HAVE to do anything, most especially what the "herd" of retail traders thinks it MUST do. Here's what we know: Any time shorts cross the 1:1 ratio with longs, they get squeezed. Currently, they are sitting at 1.2527 which is the highest they have been against longs since November 2017. Even the April squeeze saw the ratio only rising to 1.1990. Overnight, shorts have continued to grow parabolically, now sitting at 33251. The ATH for shorts was right before the April squeeze when they reached 40719. In, both, the short and shorts v. longs charts, we can see that RSI is dropping as the number/ratio is increasing which indicates bearish divergence. The longer it goes on the stronger the squeeze that will result. Bitmex 24H volatility has finally broken free of the descending wedge that it has been printing since February 2018. As I have mentioned many times before, this should indicate the return to a bull market. Of course, as I have pointed out during the live streams, we also saw price and volume rising together in the July leg up which indicates an incoming bull market as well. So, back to the original question: has price fallen enough at this point or will it drop further? Nobody knows for sure and if they are guaranteeing you one thing or the other then just know they are either lying to you or themselves. As I am writing this, I am watching large over-leveraged, under-capitalized shorts getting liquidated thereby propelling price upward almost $200 just as I warned last night would be the case. This will continue to play out as price rises because of emotional retail traders who employ the greatest leverage possible and pray that price goes their way. They are absolutely sure that price must drop further. These "casino" traders will continue to fill the bags of the real traders as they are liquidated. Ultimately, the $6800 box remains the key area of resistance that must be breached. At this time, we can see a possible inverse head and shoulders being printed. Remember, it isn't confirmed until we see volume expanding as the right shoulder is completed and price breaches the neckline. If this does not happen, then we will likely see price fall at that time. Other notable bullish views are that we are still following the Wyckoff outline with this being the LPS and, unless price breaches the June low, this leg down could be a wave 2 according to Elliott Wave Theory. The 4H and higher TFs clearly show a strong descending broadening wedge forming (one of many within many during this downtrend) within a descending channel and we can see volume increasing with price on the smaller TFs. We can also see price being supported by the December log line and accumulation continuing to increase. Until price breaches that aforementioned $6800 box, we should be wary of another leg down or at least a return toward the recent low and/or June low. We are watching the $5450 and $5250 areas in that case. The 1H chart provided denotes the other support and resistance levels that we are watching with the nearby yellow 4H block being the strongest resistance for now. A push through that box sets up a move toward $6800, depending on the strength of the breach. Traders should continue to watch price action and volume. If price continues to increase and volume increases with it, then that indicates demand and we should expect further movement up until volume drops off.
BITSTAMP:BTCUSD
by Chris_Inks
9
Bitcoin tests December log line as supportGood morning, traders. It's Monday and time to get the trading week underway. As pointed out during Friday's daily live stream (where we always go into greater depth concerning price action), Bitcoin appears to be following April's pattern. The same can be said with the shorts/longs ratio. While there are no guarantees, it does give traders something to watch as price develops. In accordance with this pattern, we saw some liquidation of over-leveraged, under-capitalized shorts during the weekend as I continued to warn about last week. This has seen that ratio drop from a high of 1.0348 to 0.8785. If the pattern continues, then we should expect to see a further drop in the ratio before another move above 1:1. Remember, patterns do not follow exactly (it could move slower or faster), however, and it is only worth watching until it isn't anymore. What I mean is that the pattern does not have to complete, so it would be risky to base a trading strategy fully on the possible pattern. We have continued to see the same types of longs and shorts liquidated throughout the weekend and into this morning. Retail traders continue to gamble rather than accumulate wealth. The daily chart shows price moving up steadily from the test as support of the descending resistance line that began at the all time high. RSI says that we need to see price breach the August 8th high of $6628 or we may see bearish divergence develop. That being said, we are also seeing possible hidden bullish divergence building on the MACD between July 14th and today. A push upward in price should complete this divergence which would then likely see price targeting the $7200 area, at least, and maybe even the top of the descending broadening wedge that has been in play since February. On a smaller scale, we can see price tapping the top of the descending broadening wedge denoted by the dotted lines as it attempts to push out of the descending wedge denoted by the solid green lines. It is also important to note that price is finding resistance at the horizontal blue line which is the April 1st low. The 30 minute chart shows price working its way toward the top of the red descending broadening wedge while printing a possible ascending wedge. Currently, price is finding resistance at the pivot and black dashed horizontal line which we've had for a while now. We really need to see price breach $6630 to signal likely advancement into the $6800 box. As always, a push up through the bottom of the pivot is a bullish indicator, and we can see hidden bullish divergence printing on the MACD's negative histogram between August 13th at 12:30 a.m. and now. However, price needs to remain above that low of $6292.70 to validate it. Support is denoted with the boxes and pivots below price. As always, risk management is key and trading without confirmations is nothing more than gambling. Retail traders should understand whether they are gambling or trading and not lie to themselves about it if they are the former. The true "sweet spot" is placing your stop loss where price action invalidates your current position but not a dollar more. Trade safe, everyone.
BITSTAMP:BTCUSD
by Chris_Inks
2
Are shorts about to provide fuel for Bitcoin appreciation?Good Friday morning, traders. The end of the week is here and Bitcoin appears to be setting up for a large move. Many traders were shaken out overnight by the drop in price and remain even more skittish now. As I mentioned during last night's live stream, yesterday's daily candle printed an inside bar which most often precedes a strong movement. While that movement can be downward, inside bars are most often associated with a reversal of the previous trend. Indicators being at or near oversold as we've seen then lately, especially on the daily, as well as shorts going parabolic the past few days into overbought territory, provide support to the idea that we will see a strong move upward. The daily chart shows price finding resistance at the descending dashed line as well as support at the S1. I am watching for a new higher high to be printed (price pushing above $8500 swing high) to confirm the potential LPS as noted on the chart. StochRSI remains strongly oversold and RSI is sitting at 36.5, just below its resistance at 41. A push through this resistance should see price pushing through the dashed line. A breach of the daily pivot around the 38.2 retracement should set up the attempt at breaching the swing high. I have been warning about the build up in shorts and at this point believe we will be seeing a short squeeze. The 30 minute chart gives you the areas I am watching noted with the boxes and horizontal lines based off various TFs. The first step for price is to breach the local swing high which is the equilibrium of that green box at $6627. Shorts should begin seeing liquidation around the mid-$6500s and mid-$6600s. I have highlighted the S1, pivot, and R1 levels in red. These are significant areas that price needs to push through to continue higher. The big move will be if price can breach the top of the blue box at $6925. That box denotes the previous supply zone/demand zone/supply zone once again. Currently, price is forming a tight pennant at the end of that $200 green candle suggesting that we should see it targeting the $6700-$6800 area. I wouldn't be surprised, depending on the degree of shorts liquidation up to that point, if we saw price extending its run to $6950. A fast enough move has the potential to see price pushing all the way up to the $7200 area as traders scramble to cover their shorts while others get liquidated. A significant number of stop losses and longs should be triggered on a breach of the top of that blue box. Failure of follow-through at this point, has the potential to see price dropping further. If so, traders should watch the boxes noted below price for support. As always, I will be discussing this in greater depth during today's live streams at 10 a.m. CST and 9 p.m. CST and looking at various TFs. TV won't allow me to post the social media site where I will be broadcasting from, but it's easy to find so I am sure if you are interested in tuning in you'll have no problem finding me. Thank you for checking out the analysis. Be sure to follow us here and leave a "like" on the way out.
BITSTAMP:BTCUSD
by Chris_Inks
5
Liquidated retail shorts will fuel Bitcoin's upward movementGood Thursday morning, traders. Things start becoming interesting now with the weekend just a day away and daily RSI sitting on oversold. If you have been tuning into our daily live streams, then you know I have discussed the various possibilities presenting themselves at this time. Daily oversold often provides a bit of a decent bounce for price, at least, though many times it results in much more significant upside. Shorts continue to build to precarious levels as they are less than one tick away from being overbought, having risen +40% in the past 6 days while longs are currently down only about 10% in the past 3 days, putting them right back around the area they were at 6 days ago. Shorts hitting overbought at the same time price hits oversold has the potential to be quite explosive. As we saw late last night, when price hit the $6350 area shorts were already being liquidated. As I have continued to mention, their recent rate of growth suggests retail traders entering on emotion which results in over-leveraged, under-capitalized positions. In other words, a quick jump up in price could send shorts spiraling into liquidation which would result in a strong move up in price. As I am writing this I am watching short positions entered on this morning's light dip already getting liquidated. We continue to see strong bullish divergence building up on the MACD's negative histogram. If today's candle closes high enough it will create a new shorter tick to that histogram thereby cementing that bullish divergence. Right now, I am watching a strong bounce out of the upper-$6100s into almost $6500. Of course we saw some significant shorts liquidating on the way which enhanced that bounce as I outlined it would above. You can use the tool at tucsky.github.io to watch the buy and sell orders greater than $100K, across all major exchanges, as well as their liquidations in real time. Now we just need to see follow-through. I'm seeing shorts continuing to build though which means retail traders are trying to FOMO in at what they think will be the top of the bounce because they're all very emotionally bearish. Again, I believe these are over-leveraged, under-capitalized shorts which will provide fuel to move higher with just a nudge further upward in price. Overhead resistance begins in earnest at the $6800 box, however price must push through $6560 to even think about that box. I have noted the support and resistance areas on the 1H chart as well as provided the bigger picture via the 1D chart. Speaking of the latter, notice that StochRSI remains almost flat in oversold territory which, as I have been pointing out the past few days, should mean we will be seeing a reversal pretty soon. In terms of Wyckoff, I believe this to be the LPS. But that means we need to see a move upward from here to a new higher high (above $8500) in the form of an SOS to confirm it. As always, I will be discussing this in greater depth during today's live streams at 10 a.m. CST and 9 p.m. CST and looking at various TFs. TV won't allow me to post the social media site where I will be broadcasting from, but it's easy to find so I am sure if you are interested in tuning in you'll have no problem finding me. Thank you for checking out the analysis. Be sure to follow us here and leave a "like" on the way out.
BITFINEX:BTCUSD
by Chris_Inks
14
Bitcoin price is sitting on support, but does it mean anything?Good Thursday morning, traders. I'm sure many of you have thrown in the towel and believe price MUST absolutely make new lows. Remember, price does not HAVE to do anything, especially not what retail traders believe it needs to do and that is why retail traders often end up buying the top and selling the bottom. While I am not convinced in which direction price is about to move just yet, here are the things that I find most compelling at this time. In addition to everything else noted below, TD sequential is at a 9 for today's daily candle and there is significant bullish divergence on the daily which provides a strong case for upward movement sooner rather than later. Bitcoin dominance continues to rise and is currently 48.8%. Price is sitting right above the S1 daily pivot and daily RSI is sitting on oversold. At this same point in 2015 (yes, I believe we are closer to that point when looking at price action and volume, not much earlier as has been suggested by everyone else looking at derivatives of this in the form of indicators) we may have been where it is noted that price was testing the downward sloping resistance line as support as well. Notice this is just slightly different than my other recent Wyckoff comparison analysis attached below which looks at the current 1D v. the previous 3D time frame. Price in both instances is also sitting on the support line indicated, which is derived from the same area in each. As I discussed in last night's live stream, this creates a perfect bounce area with indicators being oversold on many TFs and printing bullish divergences. However, it is also the perfect area from which to create a capitulation-type bounce - a terminal shakeout to remove the remaining weak hands from the market before pushing out of the correction. If this occurs, I don't expect to see price reach sub-$5000 levels at this time. Realistically, we are now testing support which is the next step after a spring, so my initial expectation would be to see price continue up from this general area. Notice I have added a red line to the current price movement as it denotes the bottom of the support area. The test after the spring should end within the support zone which in this case is denoted by the horizontal dotted line and that horizontal solid red line. So, when I say this general area, that is what I am referring to. This means price could potentially move downward another $300-$400 before completing the test and without going into capitulation. Volume has continued to drop significantly during, and since, yesterday's move down further suggesting a reversal in trend may be setting up. However, we don't trade on opinions rather we evaluate how price action and volume continue to play out and then trade accordingly. As always, I will be discussing this in greater depth during today's live streams at 10 a.m. CST and 9 p.m. CST and looking at various TFs. TV won't allow me to post the social media site where I will be broadcasting from, but it's easy to find so I am sure if you are interested in tuning in you'll have no problem finding me. Thank you for checking out the analysis. Be sure to leave a "like" on the way out.
BITSTAMP:BTCUSD
by Chris_Inks
21
Bitcoin's diamond/double bottom is playing outGood morning, traders. Bitcoin appears to be working on the bounce that I discussed was more likely than not during the live stream last night. However, we must remain aware of the potential for a dead cat bounce rather than a full reversal of what may just be a corrective leg down since the $8500 high. This recent upward momentum has pushed price above the descending wedge's resistance and closer to the local descending broadening wedge's resistance (denoted by the dotted black lines). We continue to expect price to challenge the top of the large descending broadening wedge which started printing at the $8500 high. As I mentioned, a move up from the recent low requires advancement through various stages. The first is that we need to see a strong close above the recent swing high at $7153.60. Zooming out to the 4H chart shows us that an Eve and Adam double bottom formed (another way of looking at the double bottom is that it formed a "W" pattern) which means that a breach of that swing high sets up a target of $7438 which we get by measuring the distance from the bottom to that swing high and then adding it to the latter. This double bottom is also part of the diamond I have mentioned was likely forming the past couple of days. If price manages to breach $7300 and head toward the double bottom target, then it makes a compelling case for targeting the previous box at $7630-$7800. Along the way, we have a couple of 1H boxes that should provide some temporary resistance at $7230-$7280 and $7380-7420. The top of the daily cloud resides just above the 23.6% level at $7876. A close above this would mark the first time price has been above it since January. As we can see on the daily chart, price bounced near the 61.8% level and a good breach of $7130.90 gets it above the 50% level thereby suggesting a possible trend reversal from this recent corrective leg of movement. The daily pivot sits around the 38.2% retracement level of $7455.60 and a close above it is bullish. Daily RSI and OBV are bouncing off their supports and StochRSI has completed a bullish cross at the bottom of oversold.
BITSTAMP:BTCUSD
by Chris_Inks
4
Are we really where they say in 2014?Remember, all corrections take the same general path as they are all the result of human beings and their unconscious reaction to fear and greed. They just take longer or shorter depending on the movement prior, and the movements may be more or less exaggerated. This comparison in no way suggests that price will definitively do one thing or the other. It is presented as an alternative view to the current lagging indicator narrative comparisons that have been permeating the market since February. All the other 2014 comparisons use indicator positions to attempt to make us believe where we currently are in relation to that period. The problem with that is that it only tells us a story in relation to price at that time. That in no way gives us any reason to believe that we are where they say we are now. Instead, let's take a look at volume and price action beginning with the Selling Climax (SC). Notice there is no SC until January of 2015. We, of course, had one in February of 2018. Take some time and look at all the points highlighted in both time frames, from the corrections prior to 2014 and 2018 (green and red boxes), to the price action and volume comparisons. While there are no guarantees either way, it seems to me that anyone seriously considering every other way that 2014 has been presented should at least be taking a look at it this way as well. (NOTE: The large candle prior to the SC in 2014 would appear to be an upthrust during redistribution.) Be sure to share this chart with everyone you can throughout social media, and ask those who view it to do the same, so that we can get a dialogue going and consider where this may fail in comparison or where it may present a compelling case. At the end of the day, no one knows exactly where price may end up at any time, so the only way traders can protect themselves to any extent is to understand the other side of the story they may be adhering to at the time. Only then can they apply appropriate risk management to their positions.
BNC:BLX
by Chris_Inks
5
BTC Distribution PhasesG'Day Cobbers A quick educational piece on Market Cycles. All on Charts. Message me with any Questions. G'day Thanks for dropping by, hopefully you garner something valuable from my post, be it educational or an idea towards a trade of your own. Please share, like and comment and engage with me, I am here to help. Trader, Chart analyst and all round larrikin. Reside in NQ Australia, surrounded by Crocodiles, snakes & giant spiders, not to mention the boxing Kangaroos and devilish Drop bears. It makes my job quite hazardous but strewth mate, I love it.
BITFINEX:BTCUSD
by TroyByrne
3
Bitcoin in Distribution IDEAThere are 2 things after what I call a golden Chart in my Accumulation model (I'll leave it as related Ideas). The #1 thing is we might be in a distribution, so I tried to do the same thing I did with accumulation model, but now I am doing it based on distribution model, now, #2 thing is that either one of which I have been analyzing does not fit entirely with what is happening, so I will let this open for debate. We stablished a High Top as Buying Climax that has pretty poor volume, but I could still use that as a TOP, if not you can counter analyze it with arguments please :). Now we Never touch that BC top again... never went back to 8.4k. Actually I was hopping we could go to 8.6k at least before dumping, but I guess that's the deal, so without taking any risks I decided 8.2k was a good point for shorting. Now we DID test a light resistance at 8.3k in several occasions, but then it couldn't hold so now we see a way straight to lower 7kish levels. (This perfectly fits with Descending triangle drawn in recent posts too) Now I am waiting 7.4k. Question is: Would be possible to jump once again? in that case a second Top would work well with this Schematic of Distribution, it would only give more time. This is just an idea, not an advice of any kind, just want to know what you guys think of this one and give me a like if you liked it. Thank you. :)
by G0ldenross
1
Two possible bullish Bitcoin scenarios after yesterday's moveGood morning, traders. Price dipped a bit further than expected, but so far is acting exactly as I discussed it was likely to do. We saw strong absorption on the drop as indicated by the large volume and appear to have found the bottom, for now, at around $7450. This provides two possible scenarios if price is to continue upward. The right chart shows the possibility of price having just completed subwave 4 in the larger wave 1. This is my primary count at this time. I pulled my blue box back into this chart and we can see that the low point of this move down is about midway into the box. I also have the lower two support areas denoted by the horizontal dark red lines at ~$7400 and ~$7200. The pattern for what appears to be wave 4 in this current upward movement has developed from a pennant to a flag to a descending broadening wedge. As you can see, I have updated my EW count inside that DBW to a WXY. The challenge right now is that we aren't seeing much in the way of a rebound just yet. While not a significant issue at the moment, it could possibly mean that we are in the second scenario presented in the left chart. However, if we do see volume and spread expanding throughout today and potentially into tomorrow, then it bodes well for continued upward movement from here. That being said, price sill has to break that swing high at $8500. Failure to do so gives it a double top and we can expect price to then potentially target the ~$6400 area based on the current low last night. As we can see, that would put price at the S3 pivot on this time frame. The horizontal black dashed line shows us that it is a support area. But traders have to remember a double top isn't confirmed until price breaks the valley's low. So we would actually have to see price target that $8500 area and then also breach the $7450 low from last night afterward. If price follows this course, then we can assume that the current area is distribution with accumulation occurring at a lower point, possibly as low as that $6400 area, but we will need to continue watching price action and volume as the chart develops. This left chart shows price having completed the larger wave 1 and currently completing wave 2. In this scenario, we can see price ultimately testing the ~$6800 demand box which would put it at the bottom of the ascending broadening wedge (denoted by the ascending black dotted lines) which price would have pushed out of bullishly as it ran toward $8500. If this scenario plays out, then my initial expectation is to see a wick down into the box and subsequent good rebound back out of it. I expect a lot of demand at that point as there are a lot of buyers who missed their entry there on the way up recently. Traders need to remember that price is a process and the goal is to understand what may happen and then utilize what you know, as the analyst, to decipher the probabilities as to possible price movement. In doing so, traders must be fluid in their ability to remove the possible price paths that no longer make sense and add new ones as additional data makes itself known. Strong risk management is the backbone of wealth accumulation in this game, yet sadly it is the one part of trading that most new retail traders give little, if any, time to understanding and perfecting. Yes, we are on multiple social media accounts, however TV does not allow us to advertise them. I'm sure our followers here are astute enough to find us. Thank you for following and be sure to leave a "like."
BITSTAMP:BTCUSD
by Chris_Inks
17
Bitcoin is moving as suggested was likely during the live streamGood morning, traders. It's Thursday which means the week's end is near and trade volume generally begins decreasing. The overhang from the OKEx $420 million long liquidation comes to a head tomorrow. OKEx needs price to ramp back up above $8000 by Friday's settlement, which is 16:00 Hong Kong time on August 3, to cover/mitigate the loss created by that liquidation. If it fails to do so, the exchange does have a socialized loss clawback system that will require "users that have a net profit across all three contracts for that week be subject to ." That means that traders in net profit will see the clawback rate, whatever it happens to be at that time, deducted automatically from their profit. This means that we could see the exchange spoofing buy orders to get price moving upward or larger interested/potentially negatively-affected parties doing the same. This is just speculation, but it is something to watch for as price dropping any lower would become extremely expensive for those OKEx profiteers targeted by the clawback system, especially since that significant of a clawback would likely hurt OKEx strongly in terms of user migration toward other exchanges. We saw price breach $7700 overnight and then retrace to just below the 78.6% fib level. This looks to be a deep retrace of wave 2 of this smaller movement which began at yesterday's low of $7440. A drop below this latter level suggests further bearish momentum requiring a watch of the $7200 level as the next area of support. If price continues higher without breaching that lower level, then I expect it to follow the general outline of movement created by the blue lines I added during last night's live stream (I have only modified them slightly to fit the overnight movement). Those lines in no way suggest a time frame or EW wave structure, however; rather they serve as a guide to potential price movement. At this point, price has created what appears to be a triple bottom on the 1H chart with the most recent low being higher than the previous two, suggesting upward momentum. But we do need to see follow through which means price must breach the overnight high. Doing so will pull it out of the descending broadening wedge as well. Its current structure does appear to be a mini accumulation period further supporting the idea of price appreciation. We can see strong bullish divergence between MACD's negative histogram and price as well on this time frame, so traders should be watching for the same on larger time frames too. Everything else aside, as I mentioned during last night's live stream, we expect price to at least challenge the top of the large descending broadening wedge as the fourth alternating touch which could then see a retracement as low as the middle of the DBW as the 5th movement and then a push up and out of that upper resistance line. I will discuss that more in this morning's stream. As always, TV won't allow me to advertise where we stream, but I have no doubt y'all can find it quick and easy. Thanks, as always, for following and giving a "like" to the chart!
BITSTAMP:BTCUSD
by Chris_Inks
14
Bitcoin's morning shakeout has traders reelingGood morning, traders. Price action this morning exemplifies the importance of short term traders not getting into a position when the market is moving sideways like it has been. This is what I'm constantly warning new traders about. There is no definitiveness of movement until price exits that sideways chop. Unfortunately that is also one of the most difficult things to get new traders to understand as they constantly feel the need to be in the market. This desire to do so is purely emotional and will result in losses if not kept in check. On the bright side, it does appear that we may have completed/are nearing completion of an ABC correction which would complete Wave 4 and send us up to complete Wave 5. For those who have been following my live streams, I did mention the possibility on the 27th/28th that the move down which appeared to be a spring at that time could be the ST on a larger TF with the spring to come since price had dropped significantly lower than the previous low. And that when that spring came, it would likely be at the end of the pennant -- a drop through the bottom of the pennant causing traders to go short so that those shorts would fill the C.O.'s waiting longs. Looking at the 6H chart four days later, this does appear to be the case. The challenge faced when a movement first begins is understanding what's going on. A trader's understanding should refine itself as the movement plays out allowing the trader to lessen their risk of entry but simultaneously decreasing the potential reward. This is where understanding one's particular position as trader/investor comes into play. By being honest with yourself and understanding what makes you who you are as a trader/investor (current wealth and financial position, long/short/mid-term financial and wealth goals, level of risk aversion or tolerance, and the TF you are able to trade on) you are able to develop a trading style that provides the greatest possible return for yourself. Not doing so will lead to failure in proper risk management and subsequent loss of capital. If you joined our live streams yesterday, you know I mentioned that I didn't expect to see any large directional movements out of the TR until after the monthly close. This most recent price action has set the stage for that further potential advancement. By pushing price down as has been done this morning, we are seeing a lower low in price from the July 27th swing low. We are also seeing RSI dipping into oversold on the larger TFs. A strong advance from this point would create a possible higher low in oscillators at those same points thereby creating bullish divergence and signalling further price appreciation. As we have been discussing during our live streams, keeping price within the TR creates boredom for traders causing some to exit before definitive movement and others to be shaken out with a spring. This is the removal of excess supply from the market -- "getting rid of the weak hands" as it is often referred to -- and is what appears to potentially be occurring this morning. To validate this, we need to see strong movement up as the day progresses. This strong push down before the monthly close is akin to what happens before CME and CBOE futures closes. Failure of price appreciation into this evening (beyond the monthly close) would have me considering this to be a top in spite of everything we have been seeing recently. It doesn't make sense at this time, but one of the most important skills to have as a trader is the ability to remain fluid when the market signals something different from your current position. Yes, we are on multiple social media accounts, however TV does not allow us to advertise them. I'm sure our followers here are astute enough to find us. Thank you for following and be sure to leave a "like."
BITSTAMP:BTCUSD
by Chris_Inks
16