Good morning, traders. It's Monday and time to get the trading week underway. As pointed out during Friday's daily live stream (where we always go into greater depth concerning price action), Bitcoin appears to be following April's pattern. The same can be said with the shorts/longs ratio. While there are no guarantees, it does give traders something to watch as price develops. In accordance with this pattern, we saw some liquidation of over-leveraged, under-capitalized shorts during the weekend as I continued to warn about last week. This has seen that ratio drop from a high of 1.0348 to 0.8785. If the pattern continues, then we should expect to see a further drop in the ratio before another move above 1:1. Remember, patterns do not follow exactly (it could move slower or faster), however, and it is only worth watching until it isn't anymore. What I mean is that the pattern does not have to complete, so it would be risky to base a trading strategy fully on the possible pattern. We have continued to see the same types of longs and shorts liquidated throughout the weekend and into this morning. Retail traders continue to gamble rather than accumulate wealth.
The daily chart shows price moving up steadily from the test as support of the descending resistance line that began at the all time high. RSI says that we need to see price breach the August 8th high of $6628 or we may see bearish divergence develop. That being said, we are also seeing possible hidden bullish divergence building on the MACD between July 14th and today. A push upward in price should complete this divergence which would then likely see price targeting the $7200 area, at least, and maybe even the top of the descending broadening wedge that has been in play since February. On a smaller scale, we can see price tapping the top of the descending broadening wedge denoted by the dotted lines as it attempts to push out of the descending wedge denoted by the solid green lines. It is also important to note that price is finding resistance at the horizontal blue line which is the April 1st low.
The 30 minute chart shows price working its way toward the top of the red descending broadening wedge while printing a possible ascending wedge. Currently, price is finding resistance at the pivot and black dashed horizontal line which we've had for a while now. We really need to see price breach $6630 to signal likely advancement into the $6800 box. As always, a push up through the bottom of the pivot is a bullish indicator, and we can see hidden bullish divergence printing on the MACD's negative histogram between August 13th at 12:30 a.m. and now. However, price needs to remain above that low of $6292.70 to validate it. Support is denoted with the boxes and pivots below price.
As always, risk management is key and trading without confirmations is nothing more than gambling. Retail traders should understand whether they are gambling or trading and not lie to themselves about it if they are the former. The true "sweet spot" is placing your stop loss where price action invalidates your current position but not a dollar more. Trade safe, everyone.
The daily chart shows price moving up steadily from the test as support of the descending resistance line that began at the all time high. RSI says that we need to see price breach the August 8th high of $6628 or we may see bearish divergence develop. That being said, we are also seeing possible hidden bullish divergence building on the MACD between July 14th and today. A push upward in price should complete this divergence which would then likely see price targeting the $7200 area, at least, and maybe even the top of the descending broadening wedge that has been in play since February. On a smaller scale, we can see price tapping the top of the descending broadening wedge denoted by the dotted lines as it attempts to push out of the descending wedge denoted by the solid green lines. It is also important to note that price is finding resistance at the horizontal blue line which is the April 1st low.
The 30 minute chart shows price working its way toward the top of the red descending broadening wedge while printing a possible ascending wedge. Currently, price is finding resistance at the pivot and black dashed horizontal line which we've had for a while now. We really need to see price breach $6630 to signal likely advancement into the $6800 box. As always, a push up through the bottom of the pivot is a bullish indicator, and we can see hidden bullish divergence printing on the MACD's negative histogram between August 13th at 12:30 a.m. and now. However, price needs to remain above that low of $6292.70 to validate it. Support is denoted with the boxes and pivots below price.
As always, risk management is key and trading without confirmations is nothing more than gambling. Retail traders should understand whether they are gambling or trading and not lie to themselves about it if they are the former. The true "sweet spot" is placing your stop loss where price action invalidates your current position but not a dollar more. Trade safe, everyone.
