BTCUSD wow inflection point? guessing 50k most likely.
The BTC chart is now at an important inflection point at the 42k level. Only a short while ago this was viewed as the most important support which then broke down opening a descent to ~~ 30k where we bounced and found new highs! So it's important to consider both the bull and bear case from here, wait for a clear direction to form, and trade in the direction of the case it has chosen.
The bull cases:
We are sitting on a longer term uptrend line (thick black) and expect to bounce from here. In scenario (A) we could bounce to around 51k, a previous relative high. At that point, we couuld go sideways, up or down -- but the interesting move here would be upward. In that case, we would go back towards previous highs around 65k, and possibly end up forming an ascending triangle. In this case, I'd expect to push new all time highs later in 2022, probably no earlier than August. There is some volume support for this (declining over the formation of the triangle).
The bear cases:
In this scenario, the recent formation is seen as a double top (apr and nov 2021 highs) with a more recent head and shoulders formation with neckline around this 42k level we are at currently. This projects (65k-42k) a further drop of nearly 23k, putting btc around 20k. If this were to unfold, I would expect it to come very soon, probably by April 2022, consistent with the recent downtrend line. This would also penetrate the 30k previous low and make this chart look like a giant 'M'.
Slight upside bias?
The problem with the bear case scenario is that they are so bad looking that we start to flirt with BTC getting under 10k very quickly based on chart projections from the patterns here. It is of course possible - tether could be a huge scam or many of the other issues could occur I previously identified in the 'black swan catalysts'), but seems to be much less likely. One thing is for sure though: a direction is likely to be determined soon, probably by the end of the month.
My personal outcome probability guesses:
40% chance we take path 'A', to 50-51k
30% chance we take path 'B' to 30k
20% chance we take path 'C' to 65k+
10% chance we take path 'B' lower to 10-15k
So overall I'm at maybe 60% upside, 40% downside. My positions are small BTC, ETH, LTC positions, and a large call position in BTBT. Either way, it will be exciting to see how things develop in the coming weeks and months!
The bull cases:
We are sitting on a longer term uptrend line (thick black) and expect to bounce from here. In scenario (A) we could bounce to around 51k, a previous relative high. At that point, we couuld go sideways, up or down -- but the interesting move here would be upward. In that case, we would go back towards previous highs around 65k, and possibly end up forming an ascending triangle. In this case, I'd expect to push new all time highs later in 2022, probably no earlier than August. There is some volume support for this (declining over the formation of the triangle).
The bear cases:
In this scenario, the recent formation is seen as a double top (apr and nov 2021 highs) with a more recent head and shoulders formation with neckline around this 42k level we are at currently. This projects (65k-42k) a further drop of nearly 23k, putting btc around 20k. If this were to unfold, I would expect it to come very soon, probably by April 2022, consistent with the recent downtrend line. This would also penetrate the 30k previous low and make this chart look like a giant 'M'.
Slight upside bias?
The problem with the bear case scenario is that they are so bad looking that we start to flirt with BTC getting under 10k very quickly based on chart projections from the patterns here. It is of course possible - tether could be a huge scam or many of the other issues could occur I previously identified in the 'black swan catalysts'), but seems to be much less likely. One thing is for sure though: a direction is likely to be determined soon, probably by the end of the month.
My personal outcome probability guesses:
40% chance we take path 'A', to 50-51k
30% chance we take path 'B' to 30k
20% chance we take path 'C' to 65k+
10% chance we take path 'B' lower to 10-15k
So overall I'm at maybe 60% upside, 40% downside. My positions are small BTC, ETH, LTC positions, and a large call position in BTBT. Either way, it will be exciting to see how things develop in the coming weeks and months!
Comment:
** 150 BTBT contracts, not 160
Comment:
Sold 2xJan14 MSTR 450 call
Sold 2xJan14 MSTR 500 call
still long 2x Jan14 MSTR 500 call, 150x Feb18 BTBT 5 call.
Sold 2xJan14 MSTR 500 call
still long 2x Jan14 MSTR 500 call, 150x Feb18 BTBT 5 call.
Comment:
closed remaining MSTR calls.
added 250x 5.5 jan21 BTBT calls
added 50x 5.5 jan12 BTBT calls
added 250x 5.5 jan21 BTBT calls
added 50x 5.5 jan12 BTBT calls
Comment:
brutal all round on this, and clearly broke down into "path b". 30k will come in a hurry, 24k would be next stop down. this can have big implications for MSTR, Venezuela, and if the US decides that russia is using bitcoin in some way to get around sanctions, 10-15k. or less. high "very bad" potential here.
2x Jan14 MSTR 450 call
4x Jan14 MSTR 500 call
60x Feb18 BTBT 5 call (now 160 contracts)