Short Squeeze Fractal Play
Updated
This idea comes from observing some fractal patterns on the 30m chart.
In the first cycle of the pattern, short interest climbs to 33.9k, and a short squeeze causes shorts to drop by 5.8% to 31.9k.
The pattern then repeats itself with short interest climbing to an "ATH" of 39.9k, and a short squeeze causes shorts to drop by 10.6% from 39.9k to 35.6k.
It appears we are once again primed to repeat this cycle, as short interest rapidly approaches the "ATH" of 39.9k, currently just below 39k.
As long as people keep piling into the short trade, the manipulators-in-chief will likely continue to squeeze the heck out of us, as evidenced by the increased frequency of BART patterns.
As an aside, it may be worthwhile questioning the role Bitmex may be playing in all of this, especially with their high-leverage derivatives trade business. Some traders have noticed a pattern with the recent Bitmex maintenance outage during the last short squeeze. Bitmex went off-line just as the price began to shoot up. This certainly prevented some shorts from covering, or from traders initiating leveraged longs. When Bitmex came back online, the price briefly shot up to $7150 only on Bitmex, then rapidly dropped. Coincidence? Perhaps.
In any case, these markets are heavily and easily manipulated. Don't risk more than you can afford to lose, because chances are high you will, especially if you are trading with leverage.
Short-term target: 6.8k-7k
In the first cycle of the pattern, short interest climbs to 33.9k, and a short squeeze causes shorts to drop by 5.8% to 31.9k.
The pattern then repeats itself with short interest climbing to an "ATH" of 39.9k, and a short squeeze causes shorts to drop by 10.6% from 39.9k to 35.6k.
It appears we are once again primed to repeat this cycle, as short interest rapidly approaches the "ATH" of 39.9k, currently just below 39k.
As long as people keep piling into the short trade, the manipulators-in-chief will likely continue to squeeze the heck out of us, as evidenced by the increased frequency of BART patterns.
As an aside, it may be worthwhile questioning the role Bitmex may be playing in all of this, especially with their high-leverage derivatives trade business. Some traders have noticed a pattern with the recent Bitmex maintenance outage during the last short squeeze. Bitmex went off-line just as the price began to shoot up. This certainly prevented some shorts from covering, or from traders initiating leveraged longs. When Bitmex came back online, the price briefly shot up to $7150 only on Bitmex, then rapidly dropped. Coincidence? Perhaps.
In any case, these markets are heavily and easily manipulated. Don't risk more than you can afford to lose, because chances are high you will, especially if you are trading with leverage.
Short-term target: 6.8k-7k
Note
Adjusted fractal regions due to extended blue area fractal. Note
Target just shy of 7k reached, though not in the way that was expected, with a large green candle. Instead, it was reached more gradually, as a very broad extension of the blue fractal. Maybe the manipulators-in-chief are trying to mix things up a little to appear less predictable.In any case, there are some bearish signals appearing after the recent surge upwards just shy of 7k. A bearish pinbar on the 1h and bearish evening star pattern on the 2h. Also pullback is occurring right at the 50 day MA, and RSI divergence showing up on multiple timeframes. Additionally, a bearish ascending wedge seems to be in the making, though this can convert into a bullish flag if we drop low enough and then bounce back up.
Not that all this means so much though, as whales have been ignoring TA patterns much of the time in these low volume environments, and have been doing what they want regardless. It may well just come down to a battle-of-the-whales. But FYI, just in case volume is big enough, and these patterns start having meaning again.
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