Bitcoin - Exhausting the Bulls
Atualizado
The rally over the past few weeks is highly bullish for the market in general. Many of the coins that looked left on the sidelines like Monero' and Dash' and even Litecoin' have suddenly found a breath of life. As Marc mentioned in his article today "Is it Time to Jump In"?
I maintain the Long Investment Strategy on my title because, long term I'm bullish . Yet every rally needs a break, and whether we get an impulse move to 7550 we are likely to see consolidation and subsequent pullback. The big question is how far do we pull back?
Initial support is found at the 6900ish area. This is where initial resistance becomes support. The fact that Bitcoin' has maintained 7200-7300 in the face of a 50% rise in short interest is evidence this market is still bullish . Longs are simply absorbing sell orders. I seen there is a rise now of analysts mentioning short and long interest. Even comparing the two. This is a misunderstanding of the importance of money flow . Though long interest is important, it is short interest that really dictates the flow of money.
Where we would ideally like to see a pullback terminate is just above the 6700 level. Anywhere between the 6700 and 6900 area is a setup for a short squeeze. With short interest already spiking it is likely a break 7100 attracts shorts to this market, like my articles attract "Troll Analysts". This is where the flow of money comes into play. So far this market has absorbed selloffs like a fat kid in Kentucky absorbs moon pies.
What we are looking for is a bullish reversal between 6700-6900 for a potential short fake-out and subsequent short squeeze. This would catch the bears by surprise unlike the last time where they were given full warning as we mentioned in our "contrarian" article.
There are several counts on the longer term chart below that we have been looking at for a while. The subsequent pullback will determine our trading strategy moving forward. Remember all those bears that were calling for 5500-4500-3500? Yes there are a few still out there but they are becoming less and less. They are now calling for either a rally to 9k or a correction to 6k. Great actionable insight for sure. Well there is the possibility they are wrong and we trade between 7200-7300 for the next month.
The momentum here has been bullish and it is more likely we are looking to enter wave 3 in the broader picture. This is where we are looking to enter a position trade for the broader move towards 9300-10300. The key word for the past week has been "structure" which we have written about many times. There are three things that must be aligned for a position or swing trade, position, structure and trigger. Until these all line up we remain on the sidelines. The next 48 hour should provide some insight and evidence where we can take action for a trade.
Nothing like a holiday to sit back, enjoy family and friends, throw back a few beers, burgers and ribs, and then of course my home made peach cobbler. Thanks Georgia, you have the best peaches!!! Do not forget the little things, life is short and before you know it your 50 years old wondering where the time went.
I maintain the Long Investment Strategy on my title because, long term I'm bullish . Yet every rally needs a break, and whether we get an impulse move to 7550 we are likely to see consolidation and subsequent pullback. The big question is how far do we pull back?
Initial support is found at the 6900ish area. This is where initial resistance becomes support. The fact that Bitcoin' has maintained 7200-7300 in the face of a 50% rise in short interest is evidence this market is still bullish . Longs are simply absorbing sell orders. I seen there is a rise now of analysts mentioning short and long interest. Even comparing the two. This is a misunderstanding of the importance of money flow . Though long interest is important, it is short interest that really dictates the flow of money.
Where we would ideally like to see a pullback terminate is just above the 6700 level. Anywhere between the 6700 and 6900 area is a setup for a short squeeze. With short interest already spiking it is likely a break 7100 attracts shorts to this market, like my articles attract "Troll Analysts". This is where the flow of money comes into play. So far this market has absorbed selloffs like a fat kid in Kentucky absorbs moon pies.
What we are looking for is a bullish reversal between 6700-6900 for a potential short fake-out and subsequent short squeeze. This would catch the bears by surprise unlike the last time where they were given full warning as we mentioned in our "contrarian" article.
There are several counts on the longer term chart below that we have been looking at for a while. The subsequent pullback will determine our trading strategy moving forward. Remember all those bears that were calling for 5500-4500-3500? Yes there are a few still out there but they are becoming less and less. They are now calling for either a rally to 9k or a correction to 6k. Great actionable insight for sure. Well there is the possibility they are wrong and we trade between 7200-7300 for the next month.
The momentum here has been bullish and it is more likely we are looking to enter wave 3 in the broader picture. This is where we are looking to enter a position trade for the broader move towards 9300-10300. The key word for the past week has been "structure" which we have written about many times. There are three things that must be aligned for a position or swing trade, position, structure and trigger. Until these all line up we remain on the sidelines. The next 48 hour should provide some insight and evidence where we can take action for a trade.
Nothing like a holiday to sit back, enjoy family and friends, throw back a few beers, burgers and ribs, and then of course my home made peach cobbler. Thanks Georgia, you have the best peaches!!! Do not forget the little things, life is short and before you know it your 50 years old wondering where the time went.
Nota
Nota
I wish trading view would default to the current view for posting in lieu of all 8 charts. Sorry about the mulitple posts.Nota
36 hours after posting, we are getting the pullback we were looking for. How far do we pullback? As long as the trend line remains in tact and 6900 is not taken out, there is the potential for a swing trade out of this zone. Again we need structure, position and a trigger. Until all three line up we will monitor to see the depth of the pullback.
A break of the lower support zone may imply the market is still not ready to rally. Since my crystal ball is still in the shop, we can only look to see how the market reacts for evidence if this is the start of a broader move (as shown in green on the weekly) or a continuation of the correction (as shown in blue).
Regardless this level has been on our charts for weeks now and was a level we expected to see consolidation, profit taking and a pullback. How the market reacts, resulting in the depth of the pullback will determine how we position moving forward.
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