BTCUSD: Squeeze Is Just Beginning. Waiting For A Retrace.BTCUSD update: Now you know what a short squeeze looks like. After the inside bar long trigger at 6900, price climbed dramatically and took out the 7492 level within hours. In that same move, price compromised the bearish trend line that has been intact since the beginning of this year. The swing trade that was called on S.C. reached its target for a 560 point profit.
Andrew pointed out that short interest has been at extreme highs for at least two weeks now and this is the fuel that drives the squeeze once it triggers. The herd, which is always wrong at tops and bottoms, was short at the bottom. Stop orders and margin liquidations on top of new buyers jumping in are driving price into the next resistance zone as I write this.
This is the type of price action that signals the bulls have taken control. The 7490 level was the .382 of the recent bearish swing which helped to define that bearish momentum was intact. That level was blown through the second time price tested it. The next important level was the bearish trend line in the 7800 area which was also blown through. These are the confirmations that I look for to indicate a trend reversal is in effect. What does all this mean? On pullbacks, support is more likely to hold and resistances more likely to break.
The 8091 to 8543 resistance zone (.618 of recent bearish swing) is a minor area but within it, the 8442 level is the .382 resistance relative to the broader bearish structure measured from the 11549 high. If price pushes this level, that is further confirmation that the next retrace should lead to a higher high and will serve as a high probability buying opportunity.
Where is a reasonable area to anticipate a retrace? The 7076 to 6815 minor support zone (.618 of current bullish swing). That is the area we will be looking for reversal patterns for another swing trade long.
In summary, we have been writing about bullish signs for weeks and have been maintaining long inventory as well (go back and read all the reports). Remember this market has been sitting in the largest support zone relative to the entire bullish structure up to 20K. The chances of it finding support and developing a bottom are high and now it is starting to unfold. Bottoming is a process, and this impressive squeeze is the initial move that establishes a broad double bottom. If you missed the move, there is no need to feel bad because there are always more opportunities. Keep an eye on S.C. because when we call the next swing trade, the details will be there.
Questions and comments welcome.
