Today will be the day that we broke below our major support : $ 6,000. As we could have expected it, there was a lot of liquidity for longs below 6k. Indeed, a lot of stop losses were triggered when we broke 6k and retail traders market sold (by panic) or to play the breakout. This is a typical move that market makers can take advantage of by pushing the price down and filling their bids below previous swing low (6k) and then push the price back up after they got filled.
You can usually spot those moves when you have a break below a previous swing low but a close above. This is called a Swing Failure Pattern and in this case it would be bullish.
If you add to it that we are forming a daily bullish divergence on the RSI (yet to be confirmed) the fakeout is really option that we can not discard yet. We don't have any divergence on volume though which is usually a great indicator to confirm a div on the RSI.
I took partial profit from my short (opened at $6,750) because this could be the perfect bear trap - at least it has all the characteristics.
I will add to my short positions if we go back to mid 6k (will update more on that).
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Kommentera
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Well looks like it was indeed ! After a long period of - boring - consolidation looks like market makers filled their bids below 6k before pushing it up to 6.3k. We should see some more upside in the coming days
Good post buddy, agreed about the liquidity, but imho short term lived, to take profit and use realized profit to continue more down harder. As long as there are bids in the books, exchanges have most supply and most importantly no high pump, you can short entire market in the ground. Bids just provide liquidity and are sitting ducks... being bagholders that want to breakeven and creating resistance in the future, making sure it will be harder and harder to get higher prices.
It really doesn't matter if it's called a swing failure pattern, the market structure failure point has been reached on Finex and Mex by breaking the 5.925k (while Stamp held it) and all it takes is a wick and consolidating near the wick. History is written in the charts, which changes the entire structure.
From EW perspective, 11.8k doesn't have to be broken anymore, so running, expanding or zig zag correction, then 2k.
Classical chart pattern points to 2k (investing.com/analysis/bitcoin-technicals-point-up-200323935) While it's possible to intraday trade or scalp it, I'd just look for short ops. Short term SR + fibs 4.8-5k or even 5.5.
Personally, I wouldn't bother in this ghosttown on finex, where shillmex became the leader with 100x gamblers. I've watched the charts live and the moves happen always on mex first before they are moved on finex, sometimes up to 3 seconds in advance and everyone still follows finex to arbitrage. When orderbooks become thin (illiquid), you probably want to be careful playing with leverage. Probably a good time to cash out some profits, from the memories of '14, mt gox wasn't the only one who went under, many smaller ones already did.
Just my perspective.
CryptoTrendy
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@cryptogast33, interesting comment. Indeed we didn't break the Feb 6th low on Bitstamp, neither on Coinbase nor Gemini. That gives less weight to the SFP seen on Finex and Mex
CryptoSwindle
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@CryptoTrendy, That's true. Also, on kraken xbteur the 6k low was 4.7k euros, we're still above it and jpy also has the higher low, but then again, it's dependent on the dollar reserve and dollar index. Different charts with different outlooks. I compared finex (btcusd) vs bitflyer (btcjpy) below yesterday. I don't know what effect Asia still has on bitcoin, because I see diminished effects (the most notably last event was the hack in end January when Japan tanked 30 seconds in advance of Bitfinex, while they were always big players in '13-'15 when trading on okex in yuan).
bitfinex - bigger picture, triangle break to 2k
ibb.co/cGV4po bitfinex - bigger picture, zoomed in daily (from bubble to now)
ibb.co/kv0n9o bitfinex - bigger picture, zoomed in daily (macro micro) with cme end futures & target
ibb.co/d1QyFT bitflyer (jpy) - much different chart
ibb.co/dcZQvT
Stephen-W
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Great analysis. To me it looks like a skipping stone. Each skip going lower than the last. Would skip up to ~6700 and then down to ~5700 sound reasonable? Probably over a week or two? Thank you.
birdperson7
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Excellent analysis Trendy as always :)
I was expecting huge sell pressure after breaking 6k since lot of stop loss will trigger adding to the sell pressure, but it is holding so far.
FritzWagner
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Wyckoff
Nvbtc
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Little bit relax after getting update from you..that now it is bullish
It really doesn't matter if it's called a swing failure pattern, the market structure failure point has been reached on Finex and Mex by breaking the 5.925k (while Stamp held it) and all it takes is a wick and consolidating near the wick. History is written in the charts, which changes the entire structure.
From EW perspective, 11.8k doesn't have to be broken anymore, so running, expanding or zig zag correction, then 2k.
Classical chart pattern points to 2k (investing.com/analysis/bitcoin-technicals-point-up-200323935)
While it's possible to intraday trade or scalp it, I'd just look for short ops. Short term SR + fibs 4.8-5k or even 5.5.
Personally, I wouldn't bother in this ghosttown on finex, where shillmex became the leader with 100x gamblers. I've watched the charts live and the moves happen always on mex first before they are moved on finex, sometimes up to 3 seconds in advance and everyone still follows finex to arbitrage. When orderbooks become thin (illiquid), you probably want to be careful playing with leverage. Probably a good time to cash out some profits, from the memories of '14, mt gox wasn't the only one who went under, many smaller ones already did.
Just my perspective.