BTCUSD - Outright Bearish Order Flow

BTCUSD on the 8h chart (session by session flows) is going though a period of sellers' controlled price action until proven otherwise. The OFA script clearly depicts this bearish picture by having printed an acceleration in both the velocity and the magnitude of the newly formed down-cycle. Typically, when this type of bearish wave unfolds, it carries heightened risk of follow through.

To negate this transition into a bear environment, there must be a counter cyclical move that starts creating a shift in order flow. The OFA script as usual will act as out north-star and clearly communicate that when that occurs (tip: the circles and diamonds offer early clues!). Until that transpires, do not fight the bearish-established setting in BTC.

Remember the two key main features of this indicator:

Magnitude: A major clue that will help determine the health of a trend is the type of progress by the dominant side in control of the trend. We need to ask the following question: Are the new legs in the active buy-sell side campaign as identified by the script increasing or decreasing in magnitude?

Velocity: When it comes to the distance the price moves, the magnitude is only ½ the equation. The other ½ has to do with the velocity of the move or the speed. Was the new leg created after a fast and impulsive move? Or did price make a new low or high with the movement being sluggish, compressive and taking too long to form? A good rule of thumb is to count the number of candles it took to achieve a new leg.