Where is Bitcoin Headed and is this the Ultimate Bear Trap?
アップデート済
It is not for certain where the Bitcoin 0.12% market is headed in the long-term, but it is scary to think that we could go as low as 1300. If this recent drop causes enough panic among HODLers and early investors of Bitcoin 0.12% , this possibility would not bewilder me. Some may see this as a terrible thing, but I see this as a very fortunate thing for the future adoption of Cryptocurrency. Without the dilution of Bitcoin 0.12% , it would be almost impossible for adoption to take place as the centralization of large wallets would easily disrupt the stability of Bitcoin 0.12% as a currency itself. Sir Warren Buffet once said, buy when there is blood on the streets and as traders or investors, we must look at all possibility side of the different scenarios. I see this massive drop as certainly possible, however it would be ignorant to assume outright that this is where we're headed. I wanted to follow up on my update from my previous idea about this dump being the ultimate bear trap because I certainly do believe this dump is a shakeout in order to fuel the start of a massive Bull rally. The only question is, how low will market makers be able to drive this down to and when they will decide that they've done enough shaking?
Looking at the possibilities here and low liquidity, I see this as a possibility of a liquidity run below the yearly lows to cause panic because "support has been broken! OH NO!!" If we look at past history of every major bull run which I've circled on the chart published, we get a massive drop (liquidity run) before ever pumping into new all time highs. The reason for this is that large players want to buy in cheap so they deflate the price of the markets in order to make a greater profit when they decide to inflate the price in the future by sparking FOMO. In the past, we had a deviation of breaking above the 7800 level in our trading range (which trapped a lot of bulls), I would not be surprised if this dump here is a deviation as well to liquidate longs, trap bears, and get long-term bag holders to sell. Given that we have a lot of bullish events in the upcoming future (BAKKT and ETF ), it only makes sense for market makers to want their low fills.
In my chart above I've circled the points of where bull runs began. As you can see, we get a major drop in price right before the rally. I've also made note of deviations of the trading range. I believe this current drop is a deviation as well, and that we will correct back up to 6.2 like this drop had never happened. So is this a shakeout before the breakout? I believe so, however it would be ignorant to ignore the possible downside if my theory happens to be incorrect. Being a trader is not about being right or wrong, but about the probabilities. Today's momentum will not be the same as the momentum tomorrow. We must understand that the market is dynamic and what is forecast on the chart is not absolute, just as weather predictions are not always 100% certain.
I will begin my bear analysis first to examine the worst case scenarios:
Analyzing the weekly chart, we can see that there are huge volume gaps at each support level. This is an extremely dangerous level to be in because if Bitcoin decides to break down further, then expect another 1100 point drop down to the 4400-4600 area as the next layer of support.
Currently Bitcoin is sitting just barely above a gap while holding onto dear life while trading in a 434 dollar range. From what I observe, we are currently holding quite well above the 5416 EQ (equilibrium) of this trading range. In order for the likely probability of seeing a buyback correction up to 5.8 - 6k and possibly even further back up to 6.2, we must hold and continue to close daily above this 5416 EQ level at all costs. If we are to fall below this level, then bears have taken control and we will likely begin to see the drop to my bearish 4400-4600 target.
For the bullish analysis:
If this drop is indeed a deviation from the trading range (shown on the published chart at the very beginning), then we will likely see this correct itself back up above the 6.2 - 6.5 level for an upside breakout further like the drop had never happened. The Dow Theory states that: "The manipulation of the primary trend is not possible. When large amounts of money are at stake, the temptation to manipulate is bound to be present. These short movements, from a few hours to a few weeks, could be subject to manipulation by large institutions, speculators, breaking news or rumors. Manipulation usually end the same way: the security runs down and then falls back up and continues the current trend." If my Ultimate Bear Trap theory is correct, then this manipulation will correct itself and we will see our previous trading levels.
On the daily chart, we closed yesterday with a spinning top candle and the previous day as a TD9 with a qualified previous TD8 candle on the Thomas Demark Sequential indicator. I see this as a very good chance of a reversal incoming or at least a bounce to the upside to test the broken 5.8 - 6k support level. My private indicator, the "Tommy Oscillator" is also beginning to generate rounded buy signals indicating that this is a good time to begin accumulating.
Conclusion: I will remain bullish on the theory that this drop is manipulation until the 4400 support is broken, in which I believe is a level that would be very difficult for institutions to manipulate because of the large demand at that level.
If you enjoyed reading my analysis and found it helpful, remember to click the like button and follow my TradingView for future updates. :)
Looking at the possibilities here and low liquidity, I see this as a possibility of a liquidity run below the yearly lows to cause panic because "support has been broken! OH NO!!" If we look at past history of every major bull run which I've circled on the chart published, we get a massive drop (liquidity run) before ever pumping into new all time highs. The reason for this is that large players want to buy in cheap so they deflate the price of the markets in order to make a greater profit when they decide to inflate the price in the future by sparking FOMO. In the past, we had a deviation of breaking above the 7800 level in our trading range (which trapped a lot of bulls), I would not be surprised if this dump here is a deviation as well to liquidate longs, trap bears, and get long-term bag holders to sell. Given that we have a lot of bullish events in the upcoming future (BAKKT and ETF ), it only makes sense for market makers to want their low fills.
In my chart above I've circled the points of where bull runs began. As you can see, we get a major drop in price right before the rally. I've also made note of deviations of the trading range. I believe this current drop is a deviation as well, and that we will correct back up to 6.2 like this drop had never happened. So is this a shakeout before the breakout? I believe so, however it would be ignorant to ignore the possible downside if my theory happens to be incorrect. Being a trader is not about being right or wrong, but about the probabilities. Today's momentum will not be the same as the momentum tomorrow. We must understand that the market is dynamic and what is forecast on the chart is not absolute, just as weather predictions are not always 100% certain.
I will begin my bear analysis first to examine the worst case scenarios:
Analyzing the weekly chart, we can see that there are huge volume gaps at each support level. This is an extremely dangerous level to be in because if Bitcoin decides to break down further, then expect another 1100 point drop down to the 4400-4600 area as the next layer of support.
Currently Bitcoin is sitting just barely above a gap while holding onto dear life while trading in a 434 dollar range. From what I observe, we are currently holding quite well above the 5416 EQ (equilibrium) of this trading range. In order for the likely probability of seeing a buyback correction up to 5.8 - 6k and possibly even further back up to 6.2, we must hold and continue to close daily above this 5416 EQ level at all costs. If we are to fall below this level, then bears have taken control and we will likely begin to see the drop to my bearish 4400-4600 target.
For the bullish analysis:
If this drop is indeed a deviation from the trading range (shown on the published chart at the very beginning), then we will likely see this correct itself back up above the 6.2 - 6.5 level for an upside breakout further like the drop had never happened. The Dow Theory states that: "The manipulation of the primary trend is not possible. When large amounts of money are at stake, the temptation to manipulate is bound to be present. These short movements, from a few hours to a few weeks, could be subject to manipulation by large institutions, speculators, breaking news or rumors. Manipulation usually end the same way: the security runs down and then falls back up and continues the current trend." If my Ultimate Bear Trap theory is correct, then this manipulation will correct itself and we will see our previous trading levels.
On the daily chart, we closed yesterday with a spinning top candle and the previous day as a TD9 with a qualified previous TD8 candle on the Thomas Demark Sequential indicator. I see this as a very good chance of a reversal incoming or at least a bounce to the upside to test the broken 5.8 - 6k support level. My private indicator, the "Tommy Oscillator" is also beginning to generate rounded buy signals indicating that this is a good time to begin accumulating.
Conclusion: I will remain bullish on the theory that this drop is manipulation until the 4400 support is broken, in which I believe is a level that would be very difficult for institutions to manipulate because of the large demand at that level.
If you enjoyed reading my analysis and found it helpful, remember to click the like button and follow my TradingView for future updates. :)
ノート
Looks like our pulse generated a wick above our trading range, which got sold back down pretty quickly. This was what I was afraid of. It looks like we will be ranging here between 5.4 - 5.6 wicking back and forth between each low and high to run stops/liquidations over and over again until the winner of the fight between bulls and bears are determined. We've tested the supply, now lets see how well the demand holds at 5.4k. If we close any hourly candle below the 5.4k EQ (equillibrium), then I will begin to open shorts as that means we are trading in the bearish side of the range.
ノート
while (hourly_close > 5.4){
test(5.4);
test(5.6);
}
void test(int level)
{
if (!level.strong())
{
throw new SupportLevelBroken;
}
}
This is pretty much what is going to happen for the next few days.
ノート
Big fight between bulls and bears here. Watching for buy/supply exhaustion here to take a trade.
ノート
Broke below EQ, waiting for close to confirm the drop.
ノート
Shorts closed. Nice scalp. We got a double bottom off this trading range and ran the stops placed at the previous lows. Looking to run those stops at 5665 now.
ノート
BIG Bullish Divergence. I'm ready for :rocket:
ノート
Broke below that 5.2 key trading range. Looking to add longs at 4400-4600. The bullish divergence is still present. This dump seems to be mostly from panic. I expect a very big vertical bounce around the 4400-4600 region.
Target is this next orderblock here. Got layered bids set at 4150 - 4400 if we get there.
ノート
Bouncing off OB support. Lets see how price reacts at this level.
ノート
Looks like demand dried up pretty quick on that bounce to 4653. Since we tried to bounce here at 4470 and demand dried up quick, I do not expect a vertical bounce here anymore.
If we break below that orderblock of 4157, the next orderblock support is at 2.5 - 3k. After breaking my 5.2 support trading range, I will consider my ultimate bear trap theory to be invalidated. This looks like capitulation has just begun.
Don't be surprised if we go as low as 1.2k.
ノート
Sitting on that HVN without much signs of a bounce yet. If we simply fall right through this, then we might fall straight to the next OB support at 2.5k - 3k like butter.
ノート
Currently on the 2nd day of the 13-countdown. Expect **at least** another 11 days of selloff until this 13-countdown period ends. I will be taking profits from the 4.2 buy at the bottom of this current orderblock that we are in. We didn't get the high volume buys that I wanted. I will be watching for a more flat-like bottom on the hourly to enter back into the market (if this 4.2 - 4.6 orderblock holds). If it does not hold, expect 2.5k - 3k next.
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