Get started

Spring

Shakeout/spring vs Drop after distribution On the left we have the coinbase 4hr chart from October. You can see the shakeout drop from 7990 to 7300 There is a spike in volume which acts as a spring to pump price to 10540 On the right we have the coinbase 4hr chart from November. Don't be fooled in to thinking this is the same price action. After distribution finished, the price dropped. Slowed by the moving average, walls on exchanges to encourage people to long. Compare the volume profile. So far there is no volume here and once enough leveraged longs are in, I expect the drop to continue. There could be a small rise to liquidate bottom shorters, in which case I would be looking at 9030-9070.
COINBASE:BTCUSDShort
by paulflint
BTC Wyckoff AccumulationPS - Preliminary Support (buys provide a bounce to slow move down) SC - Selling Climax (Buys absorb remaining sells , end of panic sell off) AR - Automatic Rally (Price rise caused by volume buys and lack of sells on the orderbook) ST - Secondary Test (retest of support, may occur multiple times) Shake Out - Volume sell to drop price encouraging inexperienced traders to close their longs opened at ST and possibly cause additional panic sells Spring - Buy orders filled from Shake Out and price rises sharply and orders clear remaining sell orders Test - Test of available supply. Low supply results in price mark up breaking previous resistance levels SOS - SIgn of Strength (Often a result of high volume buying or fomo after a spring) LPS - Last Point of Support (Test for Resistance / Support flip, Puillback) BU - Back-up - After a jump across the creek move, the price often experiences retest of support and will pull back close to the low after the SOS TR - Trading Range (Caused by profit taking at the end of the SOS and re-accumulation at the new price range) Length / duration can vary. Set range high as next high after SOS Set range low as LPS after SOS
COINBASE:BTCUSDEducation
by paulflint
1
BTCUSD 1H chart (5/8/2019)Good morning traders. I hope my continued insistence on risk management over everything else has gotten through to everyone. Yesterday's surprise news -- the Binance "hack" -- was a good example of the importance of risk management. Price dropped just over $200, as a result of the news, which liquidated many traders. The positive side to this is that Binance will cover the lost funds so traders didn't really lose anything. Normally, we would've expected to see a $1000 drop due to the news yet we only saw a third of that, and this morning we have already seen price recover all but $25 so far. During the drop, in our Discord last night, I mentioned that I wouldn't be surprised to see price rise back up and even make new 2019 highs pretty quickly. Why? Because accumulation has been occurring for quite a while which should mean that there isn't a lot of loose asset in the market. If much of the asset is in professional hands due to cyclical accumulation, then retail doesn't have the supply to cause price to drop significantly and stay down when they sell emotionally based on the Binance news. If this is the case, then the most likely result is that the professionals should be scooping up the retail selling. And here we are this morning, with a high that is just a few dollars off the price level when the news broke. Personally, I went long at $5772. I attempted to enter at $5720, after the 15 minute candle closed and confirmed a likely bounce, but couldn't get the order confirmed with the exchange until the higher price due to the overloaded servers. So I remain long toward my upper targets that I have mentioned numerous times in previous analysis. The 1H chart shows a great reversal candle at the bottom of the drop. We can see that price ultimately bounced at the EQ of the May 3rd TR with the candle body being supported by the HVN at $5750. Note that the volume associated with this reversal candle was greater than the volume associated with the supply candle prior to it (demand is stronger than supply). But even that supply candle's volume was less than the volume of the similar $200 supply candle earlier that morning. This tells us that there isn't as much interest in selling at these lower prices which generally means that price is ready to continue moving higher. I have relabeled the recent price action to better fit the activity seen last night. Price is now back above the 21 EMA and the top of the May 3rd TR, and has reclaimed the ascending red channel's EQ, which is bullish. It should also be noted that the move down also helped price possibly play out the 4H bearish divergence that was printing. If price can close above $5910, then I believe we will be seeing $6000 much sooner than later. I continue to watch for a close above the swing high at $5970. Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSDLong
by Chris_Inks
BTC/USD 1H/4H charts (12/24/2018)Good morning, traders, and Merry Christmas Eve. Bitcoin has been offering itself as a great present this past week and it looks like we've got some more upward momentum coming our way. I've got multiple things noted on these two charts, so take some time to understand it all. The 4H chart gives us the bigger picture. I have the large green accumulation TR noted as well as the wave count and possible IHS. The expectation is for price to complete wave 5 of this first larger wave up, followed by a retracement for the larger wave 2 which should end around the EQ of the green TR, printing the right shoulder. This would be an LPS within the TR and this accumulation would not have a Spring. We should see candle spread increasing and volume expanding as price heads into that larger wave 3, and breaks the IHS neckline, which would take it to the EQ of the light blue supply zone noted. That larger wave 4 should retest the IHS neckline as support and then thrust into a final larger wave 5 which ends at the top of the larger red price range tool target based on the height of the IHS. This gets price around $5800-$6000. It also brings the 2018 TR into play. As I have been stating all year, 2018 appears to have been accumulation with this recent move down being the Spring. If you are waiting for sub-$3000 prices, then you may not get it. That being said, I do have another EW count which would have this move up toward the $4400 area as the B wave with the C wave still to come. That C wave would see price dropping below the ST at the beginning of the blue wave 1 to make a new low. This would be a Spring in the green accumulation TR, if it were to play out like this, and then we would start counting five waves up as that should mark the lowest price we will see. Trader should watch price around the possible IHS right shoulder for clues as to which way price is likely to go at that time. The 1H chart on the right shows, what I believe to be, a running flat wave 4 correction completing. We should see the 5 waves down as drawn before beginning the wave 5 of the larger degree back up. The two recent highs would then be printing a double top (not confirmed until price closes below the horizontal green line) which has a price target of the small red price range tool target. The second top negated any potential bullish divergence in RSI or MACD in the near term, suggesting further movement down as well. The blue TR shows this small TF consolidation and would be re-accumulation without a spring (akin to what I described above) with the target being an LPS. There are never any guarantees, so traders should remain vigilant and keep their risk management strong. Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSD
by Chris_Inks
1
Bitcoin : Christmas Dead Cat Bounce over ? What's next ? Hello traders. Going to open a short position around this 4170 area at the next 4hr red candle for several reasons : - We are around a 0.786 Fib Retracement from the previous 4.4k top and 3.1 bottom which is a key level for reversal. - We are making a nasty bearish divergence on RSI, MACD and Stoch, they have proven their worth during this bear market. - It looks like we might be forming a falling wedge, which is a bearish pattern. - There is always a story of power in a trend which is most of the time defined by volume. As you can see, the volume on this last pump is really not significant compared to the overall volume of the move. It was a push that was showing that the current trend might be weakening, so we want to participate in the pullback. Looking to find 3541 as first target being the 0.618 Fib retracement of this upward move. Risk Reward ratio is 3, pretty safe. What's next for BTC ? From my experience, bottoms, real bottoms, never flatten out and then spring like the action we have seen this past week. Actual bottoms are violent formation with huge wicks in the candles, enormous % variation and very brutal action. I don't define the 3.1 low as bottom, therefore I think we will see lower levels in the beginning of Q1 or later this year. I don't want to hurt feelings of the newly found bulls on this platform but I think this is only a dead cat bounce that has had a violent spring fueled by FOMO and broken dreams. Now if this is a spring, we need to see if this was the end of the action or if there is more. Basically, the intensity and volume of the coming pullback should give us clues to whats next. If BTC manages to stand it's ground at the 0.618 Fib and look for higher prices, we might be able to make a medium term higher high before going to find the real bottom. If BTC fails to hold the 2 levels that are on the chart, things will probably turn pretty ugly. Stay Open-Minded and Trade Safe. Wishing you all a Merry Christmas and beautiful end of the year celebrations ! CR.
BITMEX:BTCUSD.PShort
by Its_Gui
16
BTC/USD 30 min/4H charts (12/20/2018)Good morning, traders. I was wrong yesterday and it appears that Bitcoin had one more leg up. This is why I continue to stress the importance of risk management, not only in your entry but also in your exit. If you watch my morning live streams then you know I consistently discuss the importance of having your exits figured out before you enter a trade. This includes, as I have stated numerous times, that point at which the trade goes against you. Fortunately, my manual trailing stop loss was hit and I was able to still notch a 16% portfolio profit on yesterday's move down while I slept as a result. Sure, I missed the extra bit of upward momentum but I ended up with a significant profit for one day's trade and I can now look to short once more this morning. Last night's move up touched the top of the TR which also happens to be the 4H R4 pivot as well as the target off the smaller wedge I discussed in the Tuesday update and noted as the red dotted line, though I believe I referred to it as dashed (). The 30 minute chart gives you an updated EW count which aligns with the slightly higher grey price tool target based on the larger wedge's width. The MACD histogram is already printing hidden bullish divergence as well signalling a possible last subwave up. However, we could see a truncated 5th subwave. The end of this first large wave, around $4220, would put price where we would expect it to be in terms of accumulation (between the AR and failed upthrust's high). For reference, please refer to the Wyckoff accumulation schematics. Furthermore, a 61.8% retrace from the projected $4220 high would be at the EQ of the light blue demand zone. Price would also be getting support from the ascending black dotted line. All of this strengthens the likelihood of yesterday's mentioned orange path, though the LPS would be about $100-$150 higher at that point. Based on this larger TR that we have been working with for a few weeks now, if we get a bounce from that blue demand, I believe the possibility of a Spring would be greatly diminished which means we could very well have seen our lowest point of this correction. Refer, specifically, to Wyckoff accumulation schematic #2 as a general guide. It also means that we should expect to end up back in the 2018 TR within the next few weeks at the most. None of this guarantees that we won't go down further, whether it's just for a Spring or to even lower targets, but it does provide more support for the narrative that I am discussing. As such, traders must continue to concentrate most of their effort on their risk management. I have outlined the proposed path on the 4H chart. As mentioned previously, yesterday's Fed comment that it will raise interest rates .25% gave DXY a strong initial bounce. However, the Fed sounded much less dovish than anticipated which caused the stock market to drop. This drop took price below the 2018 TR and I expect that we will see continues downward movement, at least in the near term though we should at least expect some sort of relief bounce before too long. I will continue to watch price action and volume to get an idea if price will make another attempt at the top of the TR or if it will find resistance at the bottom. Since that initial DXY pop, we have seen DXY continue its downward path as I mentioned we were likely to see. As a matter of fact, DXY hit my 96.20 target exactly as traders/investors seem convinced that the Fed will not raise interest rates in 2019 thereby taking the wind out of DXY's sails. As a result, the EUR/USD pair had a strong run overnight, topping out at 1.14857. I was in a short yesterday that hit my trailing stop before this move up late last night, which exited my position in a very small profit (nothing to write home about, but confirmed upward momentum), and I am currently watching price action as I look for an entry today. Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSD
by Chris_Inks
4
BTC/USD 1H/1D charts (12/14/2018)Good morning, traders. Once again, it pays to watch the morning live stream. After the breakdown of the small descending triangle, I stated that the most likely scenario was to see price print an SFP around $3200, which is exactly what happened. Price is now consolidating toward the large red descending broadening wedge's resistance. If price pops up and through it, then price should target $3360/$3370. Failure to get that pop will likely see price targeting the $3000 area. I would not be surprised to see this latter scenario develop as there appears to be a concerted effort to push price down toward that level. Watching the order books, any time price gets to the point that it should pop, we see supply being dumped onto buyers while demand remains significant below $3200. One likely explanation is that there are large buyers in that area who are trying to get their orders filled. So, it is just something to keep in mind as price moves. Price is currently working off the hidden bearish divergence on the 1H TF. This clears the way for a possible move up as described above without the impediment of such a divergence to keep it from ascending in the near-term. The 1D saw a breakdown of the pennant that was printing. The target of that breakdown is $2950 which would pull price through the bottom of the descending wedge and back to the dashed red resistance line which began with the drop out of the $6000s. This would produce a strong bear trap if it plays out prior to December 16/17th. Interestingly, the ATH was on December 17, 2018. The conspiracy theories would run hard and long if that date this year were to produce the lowest point of this correction. There is a possible double bottom printing as well, if not the left shoulder and head of an IHS. RSI continues to flirt with oversold following recent bullish divergence. It has been printing higher lows toward the area of resistance around 32-33. Logically, since we are bouncing off the ascending channel's support, we would look for price to target the top of the channel but this is not guaranteed. Reaching that point also puts price at the red wedge's resistance. Don't forget that a close above that resistance sets up a target of $1150 above the point at which price breaches it. Additionally, reaching that target confirms the double bottom (if an IHS doesn't play out first) thereby creating a target of $5430. If the IHS prints, then I will update with a target based on that particular pattern as well. Don't forget, we have discussed the possibility of a trip down to the $2500/$2600 area as well, but the further down you continue to look, the greater the likelihood we won't make it that far. What this means for traders is increased risk. The question is, would the increase in profit justify the exponential increase in risk? Only you can decide that for yourself. A good rule of thumb is that if your reward doesn't increase 2x for every 1x of risk your trade increases, then it isn't worth it. The idea is that you should be looking for exponential compensation in order to take on increased risk. The DXY continued up overnight and into this morning but appears to be potentially topping out one more. I closed out my EUR/USD long yesterday for about 30 pips of profit after it was confirmed that price would not advance any further. I am now long EUR/USD once more. Stocks continue to have a bad time. As usual, early morning buying resulted in distribution the rest of the day. There was a bit of demand showing up toward the end of it, but not enough to create anything more than a doji for the 1D candle. Price now has a lower gap to fill as a result. Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSD
by Chris_Inks
1
JSE:NPN Naspers Testing the Long-term Trend Channel Naspers has been in a down sloping channel since it a throw over of the long-term trend channel and Buying Climax (BC) formed in November 2017. It has now reached the oversold line of the long-term channel and there has been some bullish action. We see a spring with increase in volume on the reaction also seen in gaps to the upside. The Volume RSI has shown divergence with price since the start of the downward sloping channel. This all seems bullish but a jump of the 200Day SMA would have to be seen to confirm the markup in Phase D.
JSE:NPNLong
by SteynTrade
BTC/USD 30 min/1D charts (12/7/2018)Good morning, traders. As I discussed was most likely to happen, during yesterday morning's live stream, Bitcoin dropped down to the $3200/3300 level depending on which exchange you were monitoring. There wasn't any immediate pop back up though so price bears closer attention at this time. The 1D chart shows a nice descending wedge and the 30 minute shows an equally nice ascending channel. The 1D and 3D RSI are printing strong bullish divergence as well. A break upward through the ascending triangle's resistance should have price targeting the $3540 area. This will put it right back into the TR. But it must first close above the McGinley Dynamic on that 30 minute TF. This latest downward move has defined the very likely support level of a descending channel. If this is the case, then the expectation should be a move up to the top of the channel. The target mentioned above brings price to the channel's equilibrium which is the first expected resistance when trading channels. If this move down was a spring associated with the $3475-$4120 TR, then I am looking for the move up as spoken of, followed by a Test back down toward the bottom of the TR at around $3475. A successful Test should then see price making its way back up toward the top of the TR. The volume on the potential Spring was more than I would've liked to have seen, so a good Test (low volume) would be imperative to signal a successful Spring. We would then likely see a pullback at the top of the channel, creating an LPS. Again, we would be looking for low volume on that pullback. We also talked during the live stream about the larger picture and how this move down could be printing a double bottom. This pattern won't be confirmed until we see the daily close above the swing high at $4409. So, until then, it is just a possibility. The target based on that pattern would be $5430, which takes price right up to resistance. What happens after that depends on supply and demand. As long as demand is greater than supply, price will press through that level which would bring up the 2018 TR as the target. But, as mentioned, price must first close above the 30 minute TF McGinley Dynamic in order to set up a possible push through the ascending triangle. If price cannot do this, then we will continue looking lower for the targets mentioned throughout this week in my other analysis. Bitcoin price remains under pressure this morning and its continued attempts to pull itself away from the resistance line that's been keeping it in check since the drop from the $6000s have failed. Price has fallen through the black support line on yesterday's 4H chart which sets up a downside target of $1040 below the point of breach. This would put it between $2677 and the S3 pivot at $2725. Overnight a double bottom was seen on the 15 minute chart which saw price shooting back up toward that black line only to be rejected on its attempt to push through. Volume continues to pick up in the $3600-$3800 area suggesting demand continues to remain present there but the longer price sits in this area the more likely that demand is to dry up. In FOREX news, U.S. NFP numbers were released today and they were pretty ugly (as I have been suggesting was most likely throughout this week) at 150K v. the consensus of 200K. This gave our Discord members opportunity to capitalize and make money as price hit our USD/CAD and EUR/USD targets. I exited my long USD/CHF position near the 50% retrace, at about 25 pips profit, as I stated was my intention during yesterday morning's live stream. I then entered long in that same pair at 0.99079 after the report this morning, which was near the bottom of the drop (because I saw bullish RSI divergence on the 5 minute TF) and exited at 0.99307 for a similar profit. I then shorted at 0.99287 and am currently sitting at about 8 pips profit and expecting continued pressure on the USD as the algos and retail traders work out their positions relating to the news. Every day, we have a choice to act positively or negatively, so if you get a chance, do something decent for someone today which could be as simple as sharing a nice word with them. You just might change their day, or even their life. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSD
by Chris_Inks
BTC/USD 1D/1M charts (11/20/2018)Good morning, traders. I was wrong about a pop back up after price breached the $4900/$5000 level and price has continued to move through lower areas of liquidity and support with only minor pauses. This is why I have yet to take a long position. Emotional trading and/or lack of patience are the most significant reasons why retail traders lose money. While waiting for a good entry doesn't guarantee you will be profitable, it does decrease your risk exponentially. Since trading is speculation, protection of capital should always come before growth of capital. That being said, we appear to be bouncing out of $4200 which is the next area of support. So, what have I been looking for in terms of confirmation? As I mentioned during the live streams, I am waiting for a nice hammer or other strong bullish candle on the 4H TF, at the least, but preferably on the 1D, 3D, and/or 1W. Additionally, a bullish engulfing candle on one of those larger TFs would also qualify as confirmation of a bounce at the very least. This should be preceded by a lot of very negative sentiment noticeable throughout social media (which I believe we are in the process of seeing). Although volume is higher on this week of downward movement than it has been lately, the reality is that it is very small compared to the Selling Climax in February. This leads me to believe that the current shakeout is a #2 Spring which is most readily associated with a Terminal Shakeout. Whereas the #1 Spring in February is denoted by the large and increasing candle spreads and expanding volume (large drop with large supply), the #2 Spring is denoted by large and increasing candle spreads but only moderately expanding volume (large drop with moderate supply). The question is, is this the 21 or 23 version of #2 Spring? We need to continue watching price action and volume to get an idea. If you have been paying attention, then you will have noticed that Bitfinex Longs have been increasing steadily during this downswing. Why is this important? Because you should have noticed that a significant number of longs have been liquidated as well. This means that more Long positions are being opened than closed on the down move suggesting absorption. Additionally, Shorts have continued to build as price dropped further. This leads me to believe that smart money is going long while retail is going short. Possible support for such an analysis can be found in social media as the general sentiment is despair and pain. These Shorts will help fuel the move up as much of the supply should have been removed during 2018's accumulation as well as the recent shakeout. Any strong movement back up should see retail traders FOMOing in as well thereby accelerating that rebound. There is no guarantee that all of this will happen, but it remains the most likely scenario at this time, once this shakeout is complete. The 1D has printed a large descending wedge of approximately $1200 width at its widest so far. This wedge also has the requisite four alternating touches to support and resistance. What does this mean? It means that if price happens to close above the descending resistance of that wedge, before making a new low, then we should be looking for a target of $1200 above that point. Consequently, the recent low and subsequent bounce so far has been a reaction to the 1M OB which I pointed out during yesterday's live stream. There should be an expectation of resistance at $5000 and the bottom of the 2018 TR at around $5800/$6000. A close above $6500 sets up strong additional bullish momentum. There is further support around the $3600/$3700 level. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSD
by Chris_Inks
BTC broke key support - Is it game over?The support that held this market for a year has now broken. Is it game over and all hope lost for the bulls? Almost, but not yet. These markets are tricky, and they don't usually let something that looked like a little too obvious "bottom" at 5800-6100 area to actually be the bottom. Larger players know that there were lots of stop loss orders just below those levels. When you know this and have the capital to push the market just enough to trigger those stop losses in a chain reaction (one stop loss triggers the next, and so on), it is only natural that you're going to try to tap all that free liquidity by giving the price just a little nudge in that direction, and leave the rest to domino effect of panic selling and stop loss triggering along with liquidations of overleveraged traders. All of this while you have your buy orders waiting at the lower prices where those liquidations and stop losses will be sold into and absorbed. This is also why these kinds of moves are called shakeouts. It is the equivalent of shaking a tree while holding open a large bag below, and see what falls from the tree into the bag. You do this only when you see the tree has lots of ripe fruits ready to drop. This same phenomenon is also known as Wyckoff spring, phase C in Wyckoff accumulation schematic (where market operators test the demand by shaking out most of those who bought near the bottom, before the markup phase). That was the bullish case (and also the last hope for the bulls). No one can tell for sure if we're witnessing a shakeout or an actual market breakdown at this point, but there is a way to find out. How do we find out? We watch for the characteristics of a shakeout vs a real breakdown. 1. If this is a shakeout (Wyckoff spring), then the price tends to stay below the key support (in this case 5800-6200 area) only for a short time, and then shoots right back up above the support area where it can no longer be threatened by the bears. In our case, that would mean the price must not stay below 5800 when the monthly candle closes (in 12 days from now), and ideally after that time we should see it break above 6000. On the other side... 2. If this is a real breakdown, then what usually happens is, the price tries to test the previous support (now turned into resistance) which is the 5850-6200 area, and there it gets rejected hard due to many people waiting the retest to short sell or get out of their bad (trapped) buy entries. Note that if the bearish momentum is stronger than usual, then these retests only barely touch the lower boundaries of the resistance area (in this case that's 5749-5854). And finally, this below is the chart of the Wyckoff accumulation range (in case this happens to be accumulation, and we can't know that for sure yet) I posted back in July, along with what kind of moves I'd expect to see in order for it to play out. As you can see, it played out pretty well so far (as close as you can guess moves in a 5-6 months timespan). Now it remains to be seen which of the two options I described above are going to happen in order to confirm the trading plan for the next few months from now.
BITMEX:BTCUSD.P
by eyupium
3
BTC/USD 1D chart (11/15/2018) Price up?Good morning, traders. I hope you were able to join the live stream yesterday morning as we discussed exactly what happened, calmly and unemotionally (okay, so I may have laughed a bit) -- how it was playing out as I suggested it would months ago if we saw a terminal shakeout and what to expect next. So far, things continue to play out as expected. The next few days are crucial, however, in determining which way price is likely to go. The reality of it is that the 1D RSI is obscenely low at 14 and the 4H remains oversold at 9 after closing at an anemic 5.5 yesterday morning. We even see the 3D moving into oversold territory this morning. This means that we should expect a good bounce at the very least. No, it doesn't happen immediately, but it should happen sooner rather than later. As such, traders should be paying attention to the 1D chart. Not all price drops are created equal. So, what do I believe happened yesterday? I believe it was a terminal shakeout. A normal shakeout/spring is initiated during a bullish/upward trend and is a product of, or otherwise characterized by, weakening price. A terminal shakeout, however, is preceded by a trading range and comes at the end of accumulation, signalling that the preparation for mark up is complete. If you've been following me for a few months then you know price had been in a tight TR since the end of the first week in September. That's just over 2 months. You can also zoom out and notice that it had been in a larger TR since the Selling Climax on February 5th. Whichever you choose to look at, the reality is that this drop came after being in a TR for quite a while making it much more likely to be a terminal shakeout than a normal drop toward $3000 as the result of a descending triangle. The purpose of the terminal shakeout is to scare the remaining weak hands into selling their asset prior to mark up commencing by creating a false impression of the direction of the market thereby creating a "bear trap." It does this by running stops on longs and encouraging short selling. Once the shorts are locked in and stops have been run, price reverses causing shorts to liquidate or cover as well as FOMO into longs from those sitting on the sidelines. Watching tucsky.github.io we were able to witness longs' stops getting triggered and numerous, significant, liquidations. Bitfinex shorts grew 8500 in the past 24 hours. That's 45%. And of course www.coinfarm.online showed Bitmex shorts growing substantially as well, causing the funding rate to flip strong and hard to shorts paying exponentially more to longs (www.coinfarm.online). Remember, all contributors to the market affect price finding, so although Bitfinex is having its own issues with the new bank and Tether's value, and Bitmex deals with swaps, rather than spot, these things help us get a clearer picture of what's going on in the market. The terminal shakeout results from poor quality supply which is another way of saying weak hands hold too much supply. It is then answered with high quality demand. The key in all of this is how much supply is removed from the market and how much of that supply is absorbed. This will become much more clear in the next few days. So far, we saw large volume on yesterday's drop suggesting that C.O. was hard at work absorbing the supply. We continue to see good-to-decent volume today, suggesting the same. Importantly, the volume yesterday was much lower than the SC in February which tells us that there is much less supply floating around than there was back then, further suggesting 2018 has likely been accumulation. At this point, price has hit my first target area between $5250 and $5460. We may see a bit more downside, however, which would tap liquidity sitting just under $5000. If price happens to make it that far down, my expectation at this time is to see a good-sized candle as price rebounds out of that liquidity. The buildup of shorts on the shakeout should help fuel upward momentum. I expect to see a Test around the bottom of the 2018 accumulation TR ($5900 area) before continuing higher once buying picks up, but depending on just how much supply has been removed from the market, price may overshoot that level. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSD
by Chris_Inks
6