Bitcoin Mid-Week Update
TLDR:
Two Possible paths ahead for Bitcoin:
Contingency 1:
• Price drops below the range for a liquidity grab. In this case I will be a buyer at the 28.5K – 29K level.
Contingency 2:
• Price Moves above the range High. In this case I will be a seller at the 32K - 33K level.
Background:
• In the last week and a half Bitcoin is consolidating in a range.
• The range low is 29,500 USD. The range high is at 31,500 and the mid-range is at 30,500.
• Looking at the Fixed range Volume Profile shows an even tighter compression. Most of the transaction volume is clustered in the range between 30,009 – 30,824USD.
The million Satoshi question every trader is asking is which way will Bitcoin go? Up or down?
• The answer is I don’t know. Nobody does.
So, what do we do when we don’t know what is going to happen?
• We wait and prepare contingency plans.
Before I begin, I will share my philosophy about the market. I view the market as a mechanism with the purpose of causing max pain to the longs and shorts. This is all we need to know to make it in this market.
Our job as traders is to prepare a plan for every scenario and when the time comes, to execute the plan without fear or hesitation.
Contingency A: Price moves below the range low.
• IMO, this is the easiest scenario. Any move below the range low is a liquidity grab for the MM to build long positions. If Bitcoin moves below the range the most likely support is 0.382 fib retracement at 28,739$. The 0.5 fib retracement at 27,937 is not likely IMO.
• If Bitcoin moves below the range low, I expect a sharp move to the range high to follow.
Contingency B: Price moves above the range high.
• This is the max pain scenario IMO. A move above the range high is followed by a correction back to the range low. Where did we see such a move? In March and April of this year. You know the cliché, “history rhymes…”. So, let's copy the fractal of the previous consolidation and see what we get. The perfect max pain scenario: “Let’s get everyone bullish and slam price down to shake them out”.
I will divide this scenario into three phases:
Phase 1: Consolidation.
• Price stays within the confines of this tight range until July 7th. Non-Farm Payrolls and the Unemployment numbers will be published on July 7th, and this is when volatility will pick up.
Phase 2: Markup.
• On the back of bullish news such as low employment numbers, a sharp move up above the range high.
Phase 3: Markdown.
• The 33K is significant. If you remember this level was the first significant support at the initial phase of the bull market. The levels between 33K to 44.5K were the first redistribution phase of the bull market between January and May of 2022. You can’t flip such a significant level on the first try.
These are my two primary contingency plans for the rest of the week. I hope you find it useful.
NFA.
What do you think? Please share in the comments.
Best wishes.
Two Possible paths ahead for Bitcoin:
Contingency 1:
• Price drops below the range for a liquidity grab. In this case I will be a buyer at the 28.5K – 29K level.
Contingency 2:
• Price Moves above the range High. In this case I will be a seller at the 32K - 33K level.
Background:
• In the last week and a half Bitcoin is consolidating in a range.
• The range low is 29,500 USD. The range high is at 31,500 and the mid-range is at 30,500.
• Looking at the Fixed range Volume Profile shows an even tighter compression. Most of the transaction volume is clustered in the range between 30,009 – 30,824USD.
• The answer is I don’t know. Nobody does.
So, what do we do when we don’t know what is going to happen?
• We wait and prepare contingency plans.
Before I begin, I will share my philosophy about the market. I view the market as a mechanism with the purpose of causing max pain to the longs and shorts. This is all we need to know to make it in this market.
Our job as traders is to prepare a plan for every scenario and when the time comes, to execute the plan without fear or hesitation.
Contingency A: Price moves below the range low.
• IMO, this is the easiest scenario. Any move below the range low is a liquidity grab for the MM to build long positions. If Bitcoin moves below the range the most likely support is 0.382 fib retracement at 28,739$. The 0.5 fib retracement at 27,937 is not likely IMO.
• If Bitcoin moves below the range low, I expect a sharp move to the range high to follow.
• This is the max pain scenario IMO. A move above the range high is followed by a correction back to the range low. Where did we see such a move? In March and April of this year. You know the cliché, “history rhymes…”. So, let's copy the fractal of the previous consolidation and see what we get. The perfect max pain scenario: “Let’s get everyone bullish and slam price down to shake them out”.
I will divide this scenario into three phases:
Phase 1: Consolidation.
• Price stays within the confines of this tight range until July 7th. Non-Farm Payrolls and the Unemployment numbers will be published on July 7th, and this is when volatility will pick up.
Phase 2: Markup.
• On the back of bullish news such as low employment numbers, a sharp move up above the range high.
Phase 3: Markdown.
• The 33K is significant. If you remember this level was the first significant support at the initial phase of the bull market. The levels between 33K to 44.5K were the first redistribution phase of the bull market between January and May of 2022. You can’t flip such a significant level on the first try.
NFA.
What do you think? Please share in the comments.
Best wishes.
