Relief Rally? Still too early to tell
Updated
Increased volume indicates rally to take place. If this is a relief rally we can expect price to break the blue median line. In such case, the next resistance levels are at 23k (short term (days)), then 24.7k, 25.5k, and 27k coming into July. Those guessing 20k to be the bottom will be relieved, but I’d warn BTC will continue trading within the dashed blue lines as price has been working in the range of the red and blue pitchforks thus far.
Still too early to be certain if this is the end of a correction wave, or just a weaker regular bear rally to complete the 4th wave of the impulse. I remain bearish, but whales could take advantage of a potential relief and drive prices higher (by relieving sell-pressure or pumping) before another major sell-off occurs sometime in July.
Long/Short ratio is 56:43, with longs having a larger range in the order depth. Longs are also placing the biggest orders.
I'm watching for the price to break above the 0.5 Fib retrace, as this would break the bearish flag pattern and signal a short-term reversal. While possible, there's a lot of short-term resistance converging on that point (including the 50D MA which is not included in the chart) and would be incredibly risky to open a position at this current time.
Still too early to be certain if this is the end of a correction wave, or just a weaker regular bear rally to complete the 4th wave of the impulse. I remain bearish, but whales could take advantage of a potential relief and drive prices higher (by relieving sell-pressure or pumping) before another major sell-off occurs sometime in July.
Long/Short ratio is 56:43, with longs having a larger range in the order depth. Longs are also placing the biggest orders.
I'm watching for the price to break above the 0.5 Fib retrace, as this would break the bearish flag pattern and signal a short-term reversal. While possible, there's a lot of short-term resistance converging on that point (including the 50D MA which is not included in the chart) and would be incredibly risky to open a position at this current time.
Note
Okay, fixed my fib levels (NB: this will change the local resistance zones, but not by anything significant)Shoutout to @Burning-Theta for pointing this out to me!
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This is interesting. Ascending Triangle signalling a breakout is very close. Usually, this means the price will break out on the upside (as per triangle formation patterns), however, we see a clear divergence with volume (higher highs vs. lower highs). Which signal has a stronger correlation with price action?
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So price broke above Ascending Triangle only to bounce off the Modified Schiff's median line (ML), marking a lower high @ 21.7k from the 0.382 Fib level. From here the Fib levels look like they won't have a chance to hold any weight as buying pressure dries up. I'm entertaining the idea of an IHS forming with the median line as the neck-line, but even if that happens a fake-out will surely follow with all that overhead resistance converging.
Waiting to see if a lower low forms on one of the quartiles (blue and red dashed lines). And then if the lower line (LL) of the red pitch contains the channel.
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Volume is in and it looks like price may jump.
While we've seen a break to the up-side in the Nasdaq, S&P, Dow, and Russell, BTC has struggled to follow in tow. This tells me MMs still view it as a risk (relative to other markets) and price will continue down once the other rallies conclude.
I think this is an excellent opportunity to take a small trade.
Note
Waiting for Monday to see how markets move (specifically looking at S&P and NASDAQ). On Friday we saw SPX, QQQ, DJI, and RUT decouple from BTC, up >3% avg. from previous day close while BTC continues to move sideways over the weekend with decreased volume.
VRVP indicator:
BTC trending around the Point of Control line with more room to drop in the VA (Value Area) range (marked at 50% instead of default 70% because this better represents our local range).
What’s the take away?
1. Market action on Friday hasn’t influenced BTC over the weekend. This means BTC is weaker right now than other markets (especially as it’s known for having higher volatility).
2. Unless BTC sees a dead cat bounce PA will continue sideways in the short term. Low volume means BTC will move closer to the VAL line (Value Area Low) in the next day.
3. If markets fail to rally by mid week (end of week latest), and if volume doesn’t pick up on Monday to at least match volume from previous week, it would be reasonable to expect BTC to retest previous low ($17,598 USD). From there a double bottom will be formed OR we’ll enter a new (lower) volume range. It depends on how other markets perform. If the relief rally we see in the S&P and Nasdaq, et al fails this week they’ll bring BTC down with them (remember that BTC is weak right now).
I’m hoping/ expecting for a wick up to the VAH (Value Area High) before price corrects to the VAL.
The PNL you see on the chart is just to communicate how I think price will go. This is not trading advice and I do not hold any positions.
Considering other markets started to rally on Friday (or so it looks), this would be a risky trade. I’d wait to see how markets move on Monday, and if BTC is just lagging behind or has temporarily decoupled.
GL;HT everyone!
Note
So we got that wick up and safe entry.
Yellow lines (trend line and 0.618 fib) are new resistance.
Green lines (fib 0.383 and 0.236) are our new support.
Note
Been narrowing in to find a safe entry for PNL.
Now that is done, let's zoom waaaay out, keeping it simple.
Chart is self-explanatory, so let's get into it. We have five things being shown:
1. Looking at Volume/ volatility on the monthly, compared with other bottoms.
---> As you can see with the previous two bottoms, volume remained low, with notable higher bar 'bookends' on either side. With the current candle closing in just over a day, we should compare volume in mid-July and double it to project if July's volume indicates a bottom setting in.
2. Looking at the Range Filter indicator (by DW, found in community scripts), we see it marking key pivot points near/ at market bottoms and tops.
--->This indicator is still in the red. Next month will also be in the red (judging by the trajectory of the plot line).
3. Looking at date range from ATHs we see we're only at half way through winter, compared to previous crypto winter. Date ranges and cycles have been covered to death on TrandingView, so I won't go into this any further.
4. Looking at price range from previous ATH to bottom, we see the current price has already met the same distance. If you think that means we can't go lower, I only point to the point above, re: date range.
5. SOPR: I've talked about this on a previous chart but here it is again:
For those who don't know, SOPR (Spent Output Profit Ratio):
“Is a Bitcoin on-chain metric that shows whether Bitcoin spent outputs (UTXO’s) are being realised in profit or loss. It’s calculated by dividing realised value by the value at creation (price sold / price paid).”
--->In other words, it shows if the MMs are in the green or red (on average). Realised loss still has another 589.5% to drop if it were to meet Jan 2019 FUD levels.
I post this at a time when popular on-chain metrics (viz. NUPL, MVRV Z-Score, the Puell Multiple) indicate bottoming-out/ capitulation.
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