A clearer trading pattern than Satoshi Vision
Updated
Contemplating Bitcoin's next big move
I predict that the next significant move will be lower. I have a few reasons for this view, among which are technical, macro and sentiment.
The first being the most visual, are the technical patterns which I have highlighted. As Bitcoin has traded rather different in this bear market, I have found that looking for specific support ranges and trend lines hasn't been particularly helpful. The solution I found, that has benefited my trading, is watching the daily moving averages. Combining this with the added benefit of watching the RSI can give a significant edge in timing this uncertain market.
Watching the 200 Daily moving average, which had formed a major confirmation signal for this bear market in March 2022. Since then the 200 SMA has become untouchable and therefore not very relevant the last few months. We must focus on the 50 and more importantly the 100 SMA which has formed a barrier like two south poles of a magnet.
Looking at the Red circles highlighting some of the major pivot points in Bitcoin's price before heading lower, we can see how the 100 SMA has two types of resistance. The first being when the Candles press against the 100 day before getting rejected. The FTX bankruptcy ruining the chance for a more significant breakout to the upside, highlighted by the purple triangle. The second form of resistance is when Bitcoin's price achieves a break above the 50 SMA but fails to climb towards the 100 SMA. This, in my opinion really shows how fragile and out numbered the market's bulls have been.
We are currently seeing the second situation with price action running up rather quickly to the middle of the 50 & 100 SMA but losing momentum. We are seeing such positive prices, mainly due to the related positive price action in traditional markets, such as European and US indices. The S&P 500, being my go to indicator for general market sentiment, is currently entangled with the 50 & 100 SMA and might even have one final push towards the 200 Daily SMA but will be rejected again. This is an almost identical moving average pattern as seen in October 2007 - June 2008. A period before the last bulls woke to smell the coffee. Only to find what smelled a lot like excrement in their collective coffee cups (Portfolios).
Assuming with a high degree of certainty, that positive traditional market sentiment is waning. As we enter the first acknowledged year of this Great Inflationary Central Bank Recession, caused by a combination of negative interest rates and a supply chain bullwhip effect even the Russian military's logistic department might have been able to spot.
We are going to lose the last bit of positive buying sentiment, likely leading to Bitcoin's next strong rejection lower. When also considering the Yellow circles positioned on the RSI chart at the bottom, we can see a fairly predictable pattern. By watching for when BTC's RSI level for when it nears 60 and above. While combining the SMA pattern described above. We can use this to prepare for the next leg lower. I believe we are witnessing a prime example of this, at the time of writing. Hopefully leading to another similar result over the next few days or weeks.
From a macro point of view, Central banks are all engaging on further tightening measures. While Inflation is running rampant and significantly raising prices for all goods, particularly in terms of rental properties, food and living expenses. Aspects that are not proportionally represented in official government reports. Combined with this is wave of lowering company earnings and a swathe of high paying lay offs in the financial, tech and manufacturing sectors. These factors have not been factored into price yet and the likelihood of the Central bankers holding higher rates for these next two years, has not be accounted for.
The final aspect in this analysis/rant is the slow selling that has occurred. With each slow rally against the downtrend, each sideways accumulation is being held up by a "Buy the Dip" mentality. Retail is buying the dip the same way as in every bear cycle. The dumbest of funds are buying the dip, when a likely larger 25% sell off is coming down the river to Niagara Falls.
This is just one Investor's opinion, best of luck out there. Hope to see you at 112K buying a few Bitcoin too.
I predict that the next significant move will be lower. I have a few reasons for this view, among which are technical, macro and sentiment.
The first being the most visual, are the technical patterns which I have highlighted. As Bitcoin has traded rather different in this bear market, I have found that looking for specific support ranges and trend lines hasn't been particularly helpful. The solution I found, that has benefited my trading, is watching the daily moving averages. Combining this with the added benefit of watching the RSI can give a significant edge in timing this uncertain market.
Watching the 200 Daily moving average, which had formed a major confirmation signal for this bear market in March 2022. Since then the 200 SMA has become untouchable and therefore not very relevant the last few months. We must focus on the 50 and more importantly the 100 SMA which has formed a barrier like two south poles of a magnet.
Looking at the Red circles highlighting some of the major pivot points in Bitcoin's price before heading lower, we can see how the 100 SMA has two types of resistance. The first being when the Candles press against the 100 day before getting rejected. The FTX bankruptcy ruining the chance for a more significant breakout to the upside, highlighted by the purple triangle. The second form of resistance is when Bitcoin's price achieves a break above the 50 SMA but fails to climb towards the 100 SMA. This, in my opinion really shows how fragile and out numbered the market's bulls have been.
We are currently seeing the second situation with price action running up rather quickly to the middle of the 50 & 100 SMA but losing momentum. We are seeing such positive prices, mainly due to the related positive price action in traditional markets, such as European and US indices. The S&P 500, being my go to indicator for general market sentiment, is currently entangled with the 50 & 100 SMA and might even have one final push towards the 200 Daily SMA but will be rejected again. This is an almost identical moving average pattern as seen in October 2007 - June 2008. A period before the last bulls woke to smell the coffee. Only to find what smelled a lot like excrement in their collective coffee cups (Portfolios).
Assuming with a high degree of certainty, that positive traditional market sentiment is waning. As we enter the first acknowledged year of this Great Inflationary Central Bank Recession, caused by a combination of negative interest rates and a supply chain bullwhip effect even the Russian military's logistic department might have been able to spot.
We are going to lose the last bit of positive buying sentiment, likely leading to Bitcoin's next strong rejection lower. When also considering the Yellow circles positioned on the RSI chart at the bottom, we can see a fairly predictable pattern. By watching for when BTC's RSI level for when it nears 60 and above. While combining the SMA pattern described above. We can use this to prepare for the next leg lower. I believe we are witnessing a prime example of this, at the time of writing. Hopefully leading to another similar result over the next few days or weeks.
From a macro point of view, Central banks are all engaging on further tightening measures. While Inflation is running rampant and significantly raising prices for all goods, particularly in terms of rental properties, food and living expenses. Aspects that are not proportionally represented in official government reports. Combined with this is wave of lowering company earnings and a swathe of high paying lay offs in the financial, tech and manufacturing sectors. These factors have not been factored into price yet and the likelihood of the Central bankers holding higher rates for these next two years, has not be accounted for.
The final aspect in this analysis/rant is the slow selling that has occurred. With each slow rally against the downtrend, each sideways accumulation is being held up by a "Buy the Dip" mentality. Retail is buying the dip the same way as in every bear cycle. The dumbest of funds are buying the dip, when a likely larger 25% sell off is coming down the river to Niagara Falls.
This is just one Investor's opinion, best of luck out there. Hope to see you at 112K buying a few Bitcoin too.
Note
12/01/23 9 AM UTC - We are seeing a decent push up to trade along the 100 Day SMA. Likely a bit of combined short squeeze, FOMO, hope over the apparent $5 billion of FTX investor's funds that has apparently been found and final peak before turning over. Suggest looking back at the mid August, early September and early November. A low volume relatively rapid acceleration higher over the 100 Day before significant drops. Watch that daily RSI.Note
Looking like this will be turning into a 200 SMA test. Got to appreciate a big short squeeze. Watch your leverage folks.Note
Watch the Major Stock Indices for weakness, will help time your shorts.Note
Impressive short squeeze. Breaking above some key levels. Should be interesting over the next few days.Note
Looks like a top has formed. After equity earning's flow in, I think we will see a steady move lower. This pump still looks like a Bull Trap, but markets can be irrational.Note
The pump continuesTrade active
Next line of serious resistance is the 200 Week moving average. This should be the ceiling for this huge short squeeze. Getting flashbacks to the good old days of bull market pumps.
Related publications
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.