BTCUSDWhen looking at Bitcoin on the hourly time frame it seems we have continued to develop a Wyckoff Distribution Schematic with the recent pump, a possible UTAD test, being the start of the final phase before a drop.
If we were going to play this scenario we would scale in a shorts at $6850-$6990 with a retest or wait for the next bounce for a short.
Would be negated with a break and retest of $6990 so can place a stop loss at most recent high of $7279
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Here is an example of how this distribution pattern would be negated
Trade active
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Giving an update to my previous charts where we were looking for a lower high after the initial spike of the UTAD. With the lower high confirmed it was followed by a 2nd lower high which would've been ideal of an entry however the next best place is a bounce from support which is $6710.The chart here gives an example entry and target level. However of course this can be negated. We're only trading whats most probably not what is guaranteed. I shall be posting an alternative scenario too.
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Perspective is key.
Zooming out we can see we have a bull pennant forming on the D1. Now this pattern playing out would mean that my previous posts & updates from a few days on the Wyckoff distribution pattern playing out would need to be invalidated for this to break to the upside.
The great thing about pennants is that you don't have to enter until you see a break of the patter with volume to see which way the market will move.
Yes this is a bull pennant which would suggest we're going to see some upside in the next week however there's no need to commit to a position just yet and given the broader economic landscape and bitcoin still being greatly correlated to the equities markets how like are we going to see a 22% move from the current price and a 120% move from the bottom this year of $3858. It's less likely but not impossible.
The final thing to consider is purely the price action of the candles that we're seeing.
Long upper wicks suggest greater sell side pressure.
Ultimately the best thing is to monitor the distribution pattern on the shorter time frames to see if it continues to play out as expected. If the trade starts to go awry then watching for confirmation of this pattern on this HTF would give us an alternative set up to play.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.