Bitcoin - Nasty Bearish Pinbar - Recognizing Red Flags
As short interest continues to rise, the price of Bitcoin has not moved much and remains in a tight range at a major resistance level. Often traders "blame the whales" for taking them out of trades, but here we have a distinct sign that there may be some Whale activity.
We actually have written many articles on how larger operators look to manipulate markets. The old market raid, and if you have enough experienced in markets you can see the signs of manipulation, prior to a raid happening. You should at least see the red flag! Often stop searching with feeler bets, is a pre-lude to a raid. This is where market operators look for where stops, either with longs or shorts, are located. Like a poker player they put out a "feeler bet". So is there any evidence that market may be ripe for a short raid?
1) We have been lingering around the resistance level. Weak markets reject these levels quickly and pullback. We are not seeing that here.
2) Short interest continues to increase, and these orders are being absorbed by the market.
3) We saw a spike in price action, forming a bearish pinbar. This is often a feeler bet, for those searching for stops.
4) 6 million Tether was transferred from the treasury to the exchange, using ETH as collateral. (This would be like borrowing against the equity in your home to pay your monthly
payment) I want to thank the anonymous person for giving me this insight.
5) The market is overall pessimistic and bull markets do not end in pessimism, rallies start with pessimism.
6) That quick spike to 5400 might have been a feeler bet, that or someone with some size just bought a ton.
Now this does not mean a raid is impending, but it does raise the risk level of one happening. Anyone that has traded markets for a while would recognize this type of activity. I see it daily in the stock market. Setup looks sooo good, you enter and minutes later it turns in your face. I have learned over time to stay away and often take the opposite side, especially if the broader chart is supportive of a counter signal trade.
The weekly paints a different picture. This is actually a consolidation for a move higher. There is nothing bearish about the weekly and the weekly carries more weight than the daily. If you are looking at a 4 hour and trying to determine 500-1500 point moves, well your looking at a lot of noise. This is why we see often TA's flip flop from day to day. One day its a bullish pennant, the next it's a bearish triangle. Its simply a bunch of noise.
Also take into account many sold in the 4900 to 5100 area. Yes they were bragging how they nailed it all over social media, and how they were preparing to buy the dip under 4500 ohhh they are stacked to buy the double bottom. Well it is looking less likely that 4500 will be a buying opportunity let alone 3200, at least in the next week or so. Sure it can push to those levels, I am not discounting it, but the longer it stays above 5100 the more anxious and impulsive those that sold under 5100 are having seller's remorse. They will be looking to buy back what they sold, and the reason is simple. People do not have patience.
In addition, as Marc wrote, the longer an instrument lingers at a support or resistance area, the more likely it is to take it out.
In my opinion anything around 5k is a buying opportunity for the longer term. I really don't give a crap what the trolls say, the chart is clear. This has become a major support area, and if it does pullback, I am fine buying here. The broader structure is bullish, so go bear yourself! Many that sold on "That Guy's signal" are now thinking ohhhh maybe "That Guy" was wrong and will be looking to buy back where they sold. This creates a more weighted support and resistance, not some magical fibb number.
Yet that Pinbar looks nasty. This could be simply to scare out new longs, and push exuberant shorts into it. I see this all the time while day-trading. You see a signal, think ohhhh perfect long, or beautiful short, enter, it goes a few ticks in your direction than reverses on you. When it is obvious to everyone, the larger operators will take advantage of this. I saw it this morning looking at my day-trading charts with the Q's. Nice short signal, shorts piled in, and boom, within a couple minutes it took them all out.
Yep there it was, the Q's appeared to be setting up for a short, right at a resistance level. As soon as it triggered, POP, stopped out quickly. Nice feeler bet right before as well. Shorting markets is risky, just look at what happen to Qualcomm shorts. OUCHHHHH!!!! Remember longs can hold through a selloff, shorts? Well they have this think called "Liquidation".
Again this move does not mean a market raid is in play, but it should raise a flag. Whether it happens here or not is insignificant, it is something to be aware of. Anything can happen, but when I see a move like that, I step away. It is reckless to short on margin, let alone into a potential trap, regardless if it works out or not. Do it time and time again you will eventually blow out your account.
In the end, no MACD, EW or Fibb is going to tell you of this. Price action and experience of what to look for is what will keep you out of these bad trades. Again it can trigger and go lower, but be observant of the red flags, and when you see them stay away! You might miss a trade, but better to miss a trade than take a bad one!
We actually have written many articles on how larger operators look to manipulate markets. The old market raid, and if you have enough experienced in markets you can see the signs of manipulation, prior to a raid happening. You should at least see the red flag! Often stop searching with feeler bets, is a pre-lude to a raid. This is where market operators look for where stops, either with longs or shorts, are located. Like a poker player they put out a "feeler bet". So is there any evidence that market may be ripe for a short raid?
1) We have been lingering around the resistance level. Weak markets reject these levels quickly and pullback. We are not seeing that here.
2) Short interest continues to increase, and these orders are being absorbed by the market.
3) We saw a spike in price action, forming a bearish pinbar. This is often a feeler bet, for those searching for stops.
4) 6 million Tether was transferred from the treasury to the exchange, using ETH as collateral. (This would be like borrowing against the equity in your home to pay your monthly
payment) I want to thank the anonymous person for giving me this insight.
5) The market is overall pessimistic and bull markets do not end in pessimism, rallies start with pessimism.
6) That quick spike to 5400 might have been a feeler bet, that or someone with some size just bought a ton.
Now this does not mean a raid is impending, but it does raise the risk level of one happening. Anyone that has traded markets for a while would recognize this type of activity. I see it daily in the stock market. Setup looks sooo good, you enter and minutes later it turns in your face. I have learned over time to stay away and often take the opposite side, especially if the broader chart is supportive of a counter signal trade.
The weekly paints a different picture. This is actually a consolidation for a move higher. There is nothing bearish about the weekly and the weekly carries more weight than the daily. If you are looking at a 4 hour and trying to determine 500-1500 point moves, well your looking at a lot of noise. This is why we see often TA's flip flop from day to day. One day its a bullish pennant, the next it's a bearish triangle. Its simply a bunch of noise.
Also take into account many sold in the 4900 to 5100 area. Yes they were bragging how they nailed it all over social media, and how they were preparing to buy the dip under 4500 ohhh they are stacked to buy the double bottom. Well it is looking less likely that 4500 will be a buying opportunity let alone 3200, at least in the next week or so. Sure it can push to those levels, I am not discounting it, but the longer it stays above 5100 the more anxious and impulsive those that sold under 5100 are having seller's remorse. They will be looking to buy back what they sold, and the reason is simple. People do not have patience.
In addition, as Marc wrote, the longer an instrument lingers at a support or resistance area, the more likely it is to take it out.
In my opinion anything around 5k is a buying opportunity for the longer term. I really don't give a crap what the trolls say, the chart is clear. This has become a major support area, and if it does pullback, I am fine buying here. The broader structure is bullish, so go bear yourself! Many that sold on "That Guy's signal" are now thinking ohhhh maybe "That Guy" was wrong and will be looking to buy back where they sold. This creates a more weighted support and resistance, not some magical fibb number.
Yet that Pinbar looks nasty. This could be simply to scare out new longs, and push exuberant shorts into it. I see this all the time while day-trading. You see a signal, think ohhhh perfect long, or beautiful short, enter, it goes a few ticks in your direction than reverses on you. When it is obvious to everyone, the larger operators will take advantage of this. I saw it this morning looking at my day-trading charts with the Q's. Nice short signal, shorts piled in, and boom, within a couple minutes it took them all out.
Yep there it was, the Q's appeared to be setting up for a short, right at a resistance level. As soon as it triggered, POP, stopped out quickly. Nice feeler bet right before as well. Shorting markets is risky, just look at what happen to Qualcomm shorts. OUCHHHHH!!!! Remember longs can hold through a selloff, shorts? Well they have this think called "Liquidation".
Again this move does not mean a market raid is in play, but it should raise a flag. Whether it happens here or not is insignificant, it is something to be aware of. Anything can happen, but when I see a move like that, I step away. It is reckless to short on margin, let alone into a potential trap, regardless if it works out or not. Do it time and time again you will eventually blow out your account.
In the end, no MACD, EW or Fibb is going to tell you of this. Price action and experience of what to look for is what will keep you out of these bad trades. Again it can trigger and go lower, but be observant of the red flags, and when you see them stay away! You might miss a trade, but better to miss a trade than take a bad one!
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