Hindsight for your thoughts: gaps and market cap as resistance
Updated
Since bitcoin has already fallen from the price I've marked on my chart, I am going to explain why I think price will go to low 60k.
Idea Invalidation:
- If price continues to go up while above 2.5 market cap
- If bitcoin consolidates here and alts pump hard, then bitcoin rallies again
Price direction idea 1:
There are currently two unfilled CME gaps in recent times: March 2024 (63k) and April 2024 (67.5k) as seen on the chart. CME gaps usually get filled except for a few. Whenever they don't get filled, price will keep getting bought up during pre-market and reversion traders get trapped, forever holding their $4,000 shorts.
Below are examples of gaps that got filled over a long period of time.
2024 new year CME gap. 3 day weekend for NY market. Interestingly, the gap from late March 2024 was also a 3 day weekend, no dumping since Easters. Hasn't fully filled yet, might never.
December 2023 gapped up 15%. It also gapped down, but gap downs always get filled quickly so let's ignore it. The December 2023 gap up took nearly 2 months to get filled.
s3.tradingview.com/snapshots/m/MeZTqhed.png
Price direction idea 2:
I'd say this gives more confidence to my position vs. the CME gap.
Market cap: I have an indicator that shows market cap without tether in it. It's pretty much the same as the market cap, except it has nice round numbers. It has been pretty good at calling tops and bottoms of the range that's developed since early this year. You can see that although price is at different points, the range can still define a top/bottom. The bottom/top of the market cap ranges show confluence with the volume rectangles which give confidence to sizing.
See more of the cap indicator here:
Notes:
Why did crypto and NY pump so hard on the March FOMC meeting? It was confirming that rate cuts were coming, but don't tradfi participants/firms still need to pay the same interest rates their trades?
This is hindsight, but I thought it would make sense to x1 short coin-margined bitcoin above prior ATH for a better rate than treasuries. Why pay leverage tax on a bet that bitcoin will go up when you can collect funding and lock in your gains?
I looked into why funding suddenly flattened out and I saw that Ethena is cash carrying to capture funding. Will Ethena's large OI reduce volatility? Will the suppression of funding cost make price simply float upward as perp apes pull spot arbitragers to the sky?
P.S. thank you to all that's supported me throughout the years. You all mean a lot to me :)
Idea Invalidation:
- If price continues to go up while above 2.5 market cap
- If bitcoin consolidates here and alts pump hard, then bitcoin rallies again
Price direction idea 1:
There are currently two unfilled CME gaps in recent times: March 2024 (63k) and April 2024 (67.5k) as seen on the chart. CME gaps usually get filled except for a few. Whenever they don't get filled, price will keep getting bought up during pre-market and reversion traders get trapped, forever holding their $4,000 shorts.
Below are examples of gaps that got filled over a long period of time.
2024 new year CME gap. 3 day weekend for NY market. Interestingly, the gap from late March 2024 was also a 3 day weekend, no dumping since Easters. Hasn't fully filled yet, might never.
December 2023 gapped up 15%. It also gapped down, but gap downs always get filled quickly so let's ignore it. The December 2023 gap up took nearly 2 months to get filled.
s3.tradingview.com/snapshots/m/MeZTqhed.png
Price direction idea 2:
I'd say this gives more confidence to my position vs. the CME gap.
Market cap: I have an indicator that shows market cap without tether in it. It's pretty much the same as the market cap, except it has nice round numbers. It has been pretty good at calling tops and bottoms of the range that's developed since early this year. You can see that although price is at different points, the range can still define a top/bottom. The bottom/top of the market cap ranges show confluence with the volume rectangles which give confidence to sizing.
See more of the cap indicator here:
Notes:
Why did crypto and NY pump so hard on the March FOMC meeting? It was confirming that rate cuts were coming, but don't tradfi participants/firms still need to pay the same interest rates their trades?
This is hindsight, but I thought it would make sense to x1 short coin-margined bitcoin above prior ATH for a better rate than treasuries. Why pay leverage tax on a bet that bitcoin will go up when you can collect funding and lock in your gains?
I looked into why funding suddenly flattened out and I saw that Ethena is cash carrying to capture funding. Will Ethena's large OI reduce volatility? Will the suppression of funding cost make price simply float upward as perp apes pull spot arbitragers to the sky?
P.S. thank you to all that's supported me throughout the years. You all mean a lot to me :)
Note
CME gap has been filled. I am assuming BTCUSD will wick 71500 before downside. >-7% from the top, >+5% from the bottom.Note
Mean reversion trades on top/bottom market cap looks nice, but I don't have any conviction for the next >2% move.Something interesting: Binance's USD pair vs. USD perp pair is really messed up. Over 0.5% difference. Last time that happened was at ATH.
There was also a point where spot was >3% above perps and it dumped 15%
Note
Gap nearly filled! I can see downside to 60k, but it wouldn't make any sense to short here. I'm not sure where to scale in yet.
My published indicators: tradingview.com/u/NeoButane/
Sorry if I haven't replied to your message yet, I'm a bit backlogged :)
Sorry if I haven't replied to your message yet, I'm a bit backlogged :)
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