Bitcoin's Bull Trap
Updated
Hello everyone, my apologies for being absent the past weeks, but i have a reason for that, which i will explain the coming days. Also not sure when i will be active again.
For now, just wanna give my thoughts in short here on the markets.
Bitcoin: Still think it's one big sucker rally. Volumes are bad, open interests are even worse, so it still feels as if whales are simply trying to distribute at these highs (where i expected the max to be 6200/6500 month ago, then 6800 as THE max, but we got above it, but nothing changed volume wise and OI wise. So still think its the same shit, but because volumes are low, manipulation is even easier. So i dont wanna give short term predictions. I stayed out side of trading past weeks, but this seems to be an easy sell zone to me. Still a big chance they might do 1 more shake out above the 7500 to like 7800/8000, but dont wanna make predictions on that. Whales will simply continue to short squeeze as soon as they see enough leveraged shorts moved in the market. So only way to deal with this is, staying on the side line, or trade without leverage.
About the stock market. US unemployment increased again today with 6.6 mil, within 3 weeks it went to 16.8 mil. On this news markets pumped, because as insane markets are, they think the more worse the news is, bigger the chance the worse is behind us. I personally think things have just started, especially in the US. However, the US/FED have the world in handcuffs with the Dollar being the world reserve. Normally the printing of money would mean the bankruptcy of the Dollar, but as long as the rest of the world keeps using it for everything, they could simply continue to print for a long time without feeling the consequences. Thats the only fear i have that markets might not crash another 30/70% from here. Otherwise, it's such an easy sell/short here, because upside potential is sooo limited here while the downside could be extreme. It's almost a fact the world is headed into depression levels, 10% GDP drop in a year would make that a fact. How the F can the world recover from that in a few months? Since that is what the stock market is betting on. What i see around me, in my direct environment, most people can't even take 1 month without going bankrupt. From what i know/seen, most people in the western world, live from month to month, maxed out mortgage to buy the biggest house possible, lease cars (we never bought a car with a lease/loan), several times a year on holiday's (because people think it's their right). I can continue this list.
Now i know most of the Dutch people are like this and quite sure that most of Northern Europe is like that and prob a lot of North America as well. Now if this Corona problem continues another 2 months or so, causing lock downs etc, with so many people loosing their jobs, even if life goes back to normal, i just don't see the economy recover as simply as the markets are suggesting again. Will you buy a 50/100K car end of this year? Will you buy expensive materialistic stuff anytime soon if everything you have functions properly. Will you buy the expensive Iphone 12 if you already have the 10? The rich 1 to 10% of the world still can, no matter what, but what about the other 90/99%, who are the real driving force of the world economy (and make the rich even richer).
In general it's a very tough decision, think it's best to think about it yourself. It's good to listen to others, but do not think they are always right (including me 😆). But do it to learn about things, but eventually try to make your own conclusions, think about what is logical. As you know, i never expected to see Bitcoin at current prices again this soon, but as mentioned, the signs i saw past month, have not changed a bit, except that prices are higher. For the Dow, big chance high is being set today/now. Me personally, my main focus is not to short (which i will), but my main goal is to buy the low of this market crash, prices of 10/15K are still VERY likely to me. That is where i will really bet a good amount of my money.
My assumption for stock market, when looking at TA, that we are at this spot now:
For Bitcoin, at the moment looks like a triangle here at the highs. However, the last 3 highs keep getting lower, suggesting distribution. While past month Bitcoin followed the stock market to the point almost, past days Bitcoin fell behind to the Dow pumps. Now there is a lot of noise, but would say, as long as that curved red shape doesn't break, we can still drop towards the 6700/900. With the green zone being a big support level it seems. I know, still a decent chance the market whales will do another shake out short squeeze above 7500. But from the looks of it, it will fully depend on the stock market. Think if the Dow can break the 24000 and go towards the 24500, Bitcoin might short squeeze to 7700/8000 as well. They will, as long as enough people short these highs, they will abuse that as fuel to pump the market.
This channel is what i have been looking at past week or 2. As you can see, went sideways inside of it a week ago, wicked down touching the support and eventually pumped. Very similar to where we are now as well. So when looking at that, its even bullish here. I am sure of 1 thing my self, i am NOT longing here, thats the only thing i know for sure :).
This is what i am thinking for the coming weeks. The wedge on the left was quite obvious, but never got close to its target and failed. Now it could be the one on the right is real as well, but we cant keep drawing lines to just fit our picture, also the bounce from 3500/400 has become too big already to see it as a normal bearish wedge. Second danger for bears, it's hanging at the high for several days now, where normally we should have seen more rejection already. This tells me short term it could still be bullish, but i am NOT betting on it.
The green zone on the right, trying to show what volumes says. Price went up from 9600 to 11.000 on low volume, but still it got pumped and eventually high volume came in. But what was the end result? A big bull trap. So with this, also trying to show, it's very tough to predict the short term here, but to me it feels a lot it's all short term. 8000/8200 is a big level now, but the ultimate level, as mentioned few months ago, is still around 10500/11k.
If we would get to see a high volume drop below the 6800ish, than chances are VERY big it's game over for the bulls. Think that is a key zone for the short term.
Maybe a sign as well, Bitcoin followed the stock market moves very precisely past month as you can see below. But since the pump from Sunday, it has been lagging behind the Dow. Not the first time so could be meaningless, but feels as if buying power is drying up and therefore i think the only way to pump it, is if enough people short this range.
Previous analysis:
For now, just wanna give my thoughts in short here on the markets.
Bitcoin: Still think it's one big sucker rally. Volumes are bad, open interests are even worse, so it still feels as if whales are simply trying to distribute at these highs (where i expected the max to be 6200/6500 month ago, then 6800 as THE max, but we got above it, but nothing changed volume wise and OI wise. So still think its the same shit, but because volumes are low, manipulation is even easier. So i dont wanna give short term predictions. I stayed out side of trading past weeks, but this seems to be an easy sell zone to me. Still a big chance they might do 1 more shake out above the 7500 to like 7800/8000, but dont wanna make predictions on that. Whales will simply continue to short squeeze as soon as they see enough leveraged shorts moved in the market. So only way to deal with this is, staying on the side line, or trade without leverage.
About the stock market. US unemployment increased again today with 6.6 mil, within 3 weeks it went to 16.8 mil. On this news markets pumped, because as insane markets are, they think the more worse the news is, bigger the chance the worse is behind us. I personally think things have just started, especially in the US. However, the US/FED have the world in handcuffs with the Dollar being the world reserve. Normally the printing of money would mean the bankruptcy of the Dollar, but as long as the rest of the world keeps using it for everything, they could simply continue to print for a long time without feeling the consequences. Thats the only fear i have that markets might not crash another 30/70% from here. Otherwise, it's such an easy sell/short here, because upside potential is sooo limited here while the downside could be extreme. It's almost a fact the world is headed into depression levels, 10% GDP drop in a year would make that a fact. How the F can the world recover from that in a few months? Since that is what the stock market is betting on. What i see around me, in my direct environment, most people can't even take 1 month without going bankrupt. From what i know/seen, most people in the western world, live from month to month, maxed out mortgage to buy the biggest house possible, lease cars (we never bought a car with a lease/loan), several times a year on holiday's (because people think it's their right). I can continue this list.
Now i know most of the Dutch people are like this and quite sure that most of Northern Europe is like that and prob a lot of North America as well. Now if this Corona problem continues another 2 months or so, causing lock downs etc, with so many people loosing their jobs, even if life goes back to normal, i just don't see the economy recover as simply as the markets are suggesting again. Will you buy a 50/100K car end of this year? Will you buy expensive materialistic stuff anytime soon if everything you have functions properly. Will you buy the expensive Iphone 12 if you already have the 10? The rich 1 to 10% of the world still can, no matter what, but what about the other 90/99%, who are the real driving force of the world economy (and make the rich even richer).
In general it's a very tough decision, think it's best to think about it yourself. It's good to listen to others, but do not think they are always right (including me 😆). But do it to learn about things, but eventually try to make your own conclusions, think about what is logical. As you know, i never expected to see Bitcoin at current prices again this soon, but as mentioned, the signs i saw past month, have not changed a bit, except that prices are higher. For the Dow, big chance high is being set today/now. Me personally, my main focus is not to short (which i will), but my main goal is to buy the low of this market crash, prices of 10/15K are still VERY likely to me. That is where i will really bet a good amount of my money.
My assumption for stock market, when looking at TA, that we are at this spot now:
For Bitcoin, at the moment looks like a triangle here at the highs. However, the last 3 highs keep getting lower, suggesting distribution. While past month Bitcoin followed the stock market to the point almost, past days Bitcoin fell behind to the Dow pumps. Now there is a lot of noise, but would say, as long as that curved red shape doesn't break, we can still drop towards the 6700/900. With the green zone being a big support level it seems. I know, still a decent chance the market whales will do another shake out short squeeze above 7500. But from the looks of it, it will fully depend on the stock market. Think if the Dow can break the 24000 and go towards the 24500, Bitcoin might short squeeze to 7700/8000 as well. They will, as long as enough people short these highs, they will abuse that as fuel to pump the market.
This channel is what i have been looking at past week or 2. As you can see, went sideways inside of it a week ago, wicked down touching the support and eventually pumped. Very similar to where we are now as well. So when looking at that, its even bullish here. I am sure of 1 thing my self, i am NOT longing here, thats the only thing i know for sure :).
This is what i am thinking for the coming weeks. The wedge on the left was quite obvious, but never got close to its target and failed. Now it could be the one on the right is real as well, but we cant keep drawing lines to just fit our picture, also the bounce from 3500/400 has become too big already to see it as a normal bearish wedge. Second danger for bears, it's hanging at the high for several days now, where normally we should have seen more rejection already. This tells me short term it could still be bullish, but i am NOT betting on it.
The green zone on the right, trying to show what volumes says. Price went up from 9600 to 11.000 on low volume, but still it got pumped and eventually high volume came in. But what was the end result? A big bull trap. So with this, also trying to show, it's very tough to predict the short term here, but to me it feels a lot it's all short term. 8000/8200 is a big level now, but the ultimate level, as mentioned few months ago, is still around 10500/11k.
If we would get to see a high volume drop below the 6800ish, than chances are VERY big it's game over for the bulls. Think that is a key zone for the short term.
Maybe a sign as well, Bitcoin followed the stock market moves very precisely past month as you can see below. But since the pump from Sunday, it has been lagging behind the Dow. Not the first time so could be meaningless, but feels as if buying power is drying up and therefore i think the only way to pump it, is if enough people short this range.
Previous analysis:
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New Bitcoin analysis:<deleted>
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