Shades of the Shakeout of Oct 2019
In October 2019, the charts looked very similar to what we're seeing now with BTC. Price had been falling for more than a month and the 200 EMA was providing heavy resistance. Everyone was talking about a looming Death Cross (where the 50 EMA crosses below the 200 EMA). We saw bullish divergence and seller exhaustion on the daily chart (similar to today) and were positioned for a strong bullish move. However, on Oct 22nd, there was a strong selloff and the price fell about 10%. This move triggered countless stoplosses and liquidated an enormous amount of leveraged longs. Chants of "Bitcoin is Dead" were all over social media. Then, just two days (or so) after the dramatic drop, BTC rocketed up 40%.
The drop in price on the 22nd was a Liquidity Grab/Stoploss Hunt. Big players need liquidity in the markets in order to fill their desired position sizes. Many traders provide that liquidity by setting tight stoplosses at critical decision points. The traders that panicked or got stopped out on the 22nd, missed the 40% move on the 24th.
I'm **NOT** saying history is about to repeat itself or that we're going to jump 40% from here... I'm just saying that now is exactly the wrong time to panic. I'm still expecting a strong bullish move that will catch many by surprise.
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These are my personal views and not financial advice. Please do your own research before investing.
I'd love to hear your thoughts, ideas and feedback. Feel free to Comment and I'll try and get back to you quickly.
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The drop in price on the 22nd was a Liquidity Grab/Stoploss Hunt. Big players need liquidity in the markets in order to fill their desired position sizes. Many traders provide that liquidity by setting tight stoplosses at critical decision points. The traders that panicked or got stopped out on the 22nd, missed the 40% move on the 24th.
I'm **NOT** saying history is about to repeat itself or that we're going to jump 40% from here... I'm just saying that now is exactly the wrong time to panic. I'm still expecting a strong bullish move that will catch many by surprise.
----------------------------------------------------------------
These are my personal views and not financial advice. Please do your own research before investing.
I'd love to hear your thoughts, ideas and feedback. Feel free to Comment and I'll try and get back to you quickly.
If you appreciated this analysis, consider Liking or Following. Thanks!
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