Good morning traders. Bitcoin price reached $5970 yesterday evening and, in typical retail trader fashion, now people are starting to think about entering. Unless you have a lot of experience and understand/employ strong risk management, it makes little sense to enter right now just as price is entering overheard resistance. There's too much risk associated with price suddenly dropping due to the resistance. While I do believe we have some further upward momentum coming, it is not guaranteed by any means. One of the most basic trading axioms is to never short support or long resistance -- traders should always wait for a break and confirmation of directional continuation. If price continues upward, as I expect, then we will likely see news reports about it thereby encouraging new retail money to enter the market and that leads us to the "theory."
There is a theory making its rounds through social media stating that professionals accumulated at $3100 and are going to sell it at $6000-$6500 after news hits the wires that price overcome $6K, because there will be a flood of new money to buy all that distribution. First, accumulation most likely appears to have occurred around $6000 and $3100 (after the hypodermic distribution, it's actually most likely that price entered, specifically, an accumulation with weakness phase where we see lower lows and highs as accumulation occurs in the form of a descending wedge). If that's the case, then there won't be a significant dumping at the $6000 level. Second, even if all the accumulation happened at $3100, the idea of major cycle accumulation is to hold, not sell it at 100%. As such, the professionals wouldn't be selling everything for a measly 100% profit. The nearest version of truth to this theory would be that price will make much lower new lows (think: sub-$2000). In that case, the strong accumulation that the theory states took place at $3100 wouldn't be true because professionals wouldn't be accumulating that heavily for just a 100% possible profit. There is a fundamental lack of understanding of market cycles and accumulation/distribution phases that runs rampant on cryptotwitter and tradingview. Continue following it at your own peril.
So what are we seeing at the moment? The 1H chart shows price printing a local TR/flag at the ascending channel's resistance. We want to see a close above last night's $5970 swing high now. If we can get that then, based on the height of the red ascending channel, price should be targeting the $6265 level, just under the R2 pivot (which is also just a couple of hundred dollars below the top of the large ascending channel.
With shorts continuing to build, at what point do you think people will stop shorting and start longing? Such a move has the potential to pop price significantly upward and establish the $6000 level as support, lower price never to be seen again. Until that close above the swing high, though, this could just be a bull trap above channel resistance. The 1H 21 EMA appears to be continuing to provide support and the current candle looks like a liquidity-generating Terminal Shakeout, but we will need to see how the candle closes.
For now, we should expect the HVNs at $5765-$5685 to provide support. Below that, we should be watching $5590 for support. If we don't see upward continuation today, then we may confirm the 4H bearish divergence that's printing. For now, I'm still expecting the November 18th supply/demand flip to ultimately provide support. So far, we are seeing strong demand devouring the incoming supply as this drop retested the larger, May 3rd, TR as support. This is likely printing a BUEC/LPS before the next move up. It's my belief that traders are concentrating on the very short TFs right now, rather than zooming out to the bigger picture and, as a result, will provide fuel to any upward movement from here as they continue to get shaken out by the lower TF noise.
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.
There is a theory making its rounds through social media stating that professionals accumulated at $3100 and are going to sell it at $6000-$6500 after news hits the wires that price overcome $6K, because there will be a flood of new money to buy all that distribution. First, accumulation most likely appears to have occurred around $6000 and $3100 (after the hypodermic distribution, it's actually most likely that price entered, specifically, an accumulation with weakness phase where we see lower lows and highs as accumulation occurs in the form of a descending wedge). If that's the case, then there won't be a significant dumping at the $6000 level. Second, even if all the accumulation happened at $3100, the idea of major cycle accumulation is to hold, not sell it at 100%. As such, the professionals wouldn't be selling everything for a measly 100% profit. The nearest version of truth to this theory would be that price will make much lower new lows (think: sub-$2000). In that case, the strong accumulation that the theory states took place at $3100 wouldn't be true because professionals wouldn't be accumulating that heavily for just a 100% possible profit. There is a fundamental lack of understanding of market cycles and accumulation/distribution phases that runs rampant on cryptotwitter and tradingview. Continue following it at your own peril.
So what are we seeing at the moment? The 1H chart shows price printing a local TR/flag at the ascending channel's resistance. We want to see a close above last night's $5970 swing high now. If we can get that then, based on the height of the red ascending channel, price should be targeting the $6265 level, just under the R2 pivot (which is also just a couple of hundred dollars below the top of the large ascending channel.
With shorts continuing to build, at what point do you think people will stop shorting and start longing? Such a move has the potential to pop price significantly upward and establish the $6000 level as support, lower price never to be seen again. Until that close above the swing high, though, this could just be a bull trap above channel resistance. The 1H 21 EMA appears to be continuing to provide support and the current candle looks like a liquidity-generating Terminal Shakeout, but we will need to see how the candle closes.
For now, we should expect the HVNs at $5765-$5685 to provide support. Below that, we should be watching $5590 for support. If we don't see upward continuation today, then we may confirm the 4H bearish divergence that's printing. For now, I'm still expecting the November 18th supply/demand flip to ultimately provide support. So far, we are seeing strong demand devouring the incoming supply as this drop retested the larger, May 3rd, TR as support. This is likely printing a BUEC/LPS before the next move up. It's my belief that traders are concentrating on the very short TFs right now, rather than zooming out to the bigger picture and, as a result, will provide fuel to any upward movement from here as they continue to get shaken out by the lower TF noise.
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.