Why $4100 Resistance Smacked Down. 5th Wave. Significant Price.
Hello All,
I have seen a lot of anger in regards to the pull back we had yesterday. Some of the "Top" content marketer course sellers who got the call wrong are claiming it was manipulation, and that their analysis could not have been wrong. They told their audience to go "long" above $4,000, then the price just smashed down. The only argument they have for missing it is to scream "MANIPULATION!" So, let's see... was it?
To me, it's clearly obvious why the fall was so aggressive, and why there was no follow through afterwards.
First of all, we had what was perceived to be an "Uptrend". Since many people on Tradingview are new to this space, and joined within the last year, an "uptrend" is when the price goes higher and higher and higher. lol. Yes, I know, sounds simple and obvious. But, most are so bearish and used to downtrends, they don't remember what an uptrend is like. But what occurs in an uptrend is that people start noticing the uptrend, and start making entries. Once those entries get made, they start setting stop losses below their buy in price. One after another, new people enter into the trend, setting stop losses below where they made their entry. And when the breakout occurred on Saturday, many new people jumped in wanting to ride the free money gravy train... and setting stop losses.
Once price reached just above $4100, which as you can see from the chart, has historically been a resistance point, and it was not able to overcome it, we started moving down, and one by one, stop losses got triggered. And stop losses are not something done by people saying "Oh no! Sell!!!" They are automatically triggered, and it happens in a blink of an eye.
And that's what you see. Thousands of stop losses triggered level by level, all at once. And it produces a straight line down.
This is common after we complete five waves up. The market gets euphoric in the fifth wave and thinks we are starting a bullish cycle. But, it's actually the end of a move. The fifth wave. It's running out of steam, and running into a historical resistance level.
When we check the "fear and greed index", which you can search for on Google. We had the most "greed" since February of 2018. Most people thought they had it all figured out and were getting greedy. And what happens to the herd? They get slaughtered. Most lose. This is not a game of where most win. This is a game of where most lose, and you must outsmart most. So the fact that most lost here, and then most agree it was "manipulation", is just silly. 5 waves, resistance, and greed kicked in.
I still have faith we have more up to do. But we have to consolidate for a while. And it's absolutely no surprise that $4100 said no and rejected, and that stop losses triggered in a straight line.
When a real uptrend begins in Bitcoin, this is how shakeouts happen, over and over again. Straight lines down. You have to have balls of steel during an uptrend, because this will happen MANY times.
I have seen a lot of anger in regards to the pull back we had yesterday. Some of the "Top" content marketer course sellers who got the call wrong are claiming it was manipulation, and that their analysis could not have been wrong. They told their audience to go "long" above $4,000, then the price just smashed down. The only argument they have for missing it is to scream "MANIPULATION!" So, let's see... was it?
To me, it's clearly obvious why the fall was so aggressive, and why there was no follow through afterwards.
First of all, we had what was perceived to be an "Uptrend". Since many people on Tradingview are new to this space, and joined within the last year, an "uptrend" is when the price goes higher and higher and higher. lol. Yes, I know, sounds simple and obvious. But, most are so bearish and used to downtrends, they don't remember what an uptrend is like. But what occurs in an uptrend is that people start noticing the uptrend, and start making entries. Once those entries get made, they start setting stop losses below their buy in price. One after another, new people enter into the trend, setting stop losses below where they made their entry. And when the breakout occurred on Saturday, many new people jumped in wanting to ride the free money gravy train... and setting stop losses.
Once price reached just above $4100, which as you can see from the chart, has historically been a resistance point, and it was not able to overcome it, we started moving down, and one by one, stop losses got triggered. And stop losses are not something done by people saying "Oh no! Sell!!!" They are automatically triggered, and it happens in a blink of an eye.
And that's what you see. Thousands of stop losses triggered level by level, all at once. And it produces a straight line down.
This is common after we complete five waves up. The market gets euphoric in the fifth wave and thinks we are starting a bullish cycle. But, it's actually the end of a move. The fifth wave. It's running out of steam, and running into a historical resistance level.
When we check the "fear and greed index", which you can search for on Google. We had the most "greed" since February of 2018. Most people thought they had it all figured out and were getting greedy. And what happens to the herd? They get slaughtered. Most lose. This is not a game of where most win. This is a game of where most lose, and you must outsmart most. So the fact that most lost here, and then most agree it was "manipulation", is just silly. 5 waves, resistance, and greed kicked in.
I still have faith we have more up to do. But we have to consolidate for a while. And it's absolutely no surprise that $4100 said no and rejected, and that stop losses triggered in a straight line.
When a real uptrend begins in Bitcoin, this is how shakeouts happen, over and over again. Straight lines down. You have to have balls of steel during an uptrend, because this will happen MANY times.
Comment:
Be careful. This thing could mess you up if you buy above $4200. Right now, it looks like we could potentially have completed wave 4. And NOW are doing wave 5. Wave 4 did not go below the top of wave 1, making it valid. However, I fear many of you will buy above the top of wave 3, then get hurt all over again. Just be cautious and make smart entries and stop losses if you intend to day trade this.
Comment:
Hit play ;)
Here is a BTC analysis I posted three days ago, specifically stating it was too risky to long, and that the safer play is to wait for the breakout to $5500, then wait for a big pullback to the levels we are at now.