Liquidated retail shorts will fuel Bitcoin's upward movement
Good Thursday morning, traders. Things start becoming interesting now with the weekend just a day away and daily RSI sitting on oversold. If you have been tuning into our daily live streams, then you know I have discussed the various possibilities presenting themselves at this time. Daily oversold often provides a bit of a decent bounce for price, at least, though many times it results in much more significant upside. Shorts continue to build to precarious levels as they are less than one tick away from being overbought, having risen +40% in the past 6 days while longs are currently down only about 10% in the past 3 days, putting them right back around the area they were at 6 days ago. Shorts hitting overbought at the same time price hits oversold has the potential to be quite explosive. As we saw late last night, when price hit the $6350 area shorts were already being liquidated. As I have continued to mention, their recent rate of growth suggests retail traders entering on emotion which results in over-leveraged, under-capitalized positions. In other words, a quick jump up in price could send shorts spiraling into liquidation which would result in a strong move up in price. As I am writing this I am watching short positions entered on this morning's light dip already getting liquidated.
We continue to see strong bullish divergence building up on the MACD's negative histogram. If today's candle closes high enough it will create a new shorter tick to that histogram thereby cementing that bullish divergence. Right now, I am watching a strong bounce out of the upper-$6100s into almost $6500. Of course we saw some significant shorts liquidating on the way which enhanced that bounce as I outlined it would above. You can use the tool at tucsky.github.io/SignificantTrades/ to watch the buy and sell orders greater than $100K, across all major exchanges, as well as their liquidations in real time. Now we just need to see follow-through. I'm seeing shorts continuing to build though which means retail traders are trying to FOMO in at what they think will be the top of the bounce because they're all very emotionally bearish. Again, I believe these are over-leveraged, under-capitalized shorts which will provide fuel to move higher with just a nudge further upward in price. Overhead resistance begins in earnest at the $6800 box, however price must push through $6560 to even think about that box. I have noted the support and resistance areas on the 1H chart as well as provided the bigger picture via the 1D chart. Speaking of the latter, notice that StochRSI remains almost flat in oversold territory which, as I have been pointing out the past few days, should mean we will be seeing a reversal pretty soon. In terms of Wyckoff, I believe this to be the LPS. But that means we need to see a move upward from here to a new higher high (above $8500) in the form of an SOS to confirm it.
As always, I will be discussing this in greater depth during today's live streams at 10 a.m. CST and 9 p.m. CST and looking at various TFs. TV won't allow me to post the social media site where I will be broadcasting from, but it's easy to find so I am sure if you are interested in tuning in you'll have no problem finding me. Thank you for checking out the analysis. Be sure to follow us here and leave a "like" on the way out.
We continue to see strong bullish divergence building up on the MACD's negative histogram. If today's candle closes high enough it will create a new shorter tick to that histogram thereby cementing that bullish divergence. Right now, I am watching a strong bounce out of the upper-$6100s into almost $6500. Of course we saw some significant shorts liquidating on the way which enhanced that bounce as I outlined it would above. You can use the tool at tucsky.github.io/SignificantTrades/ to watch the buy and sell orders greater than $100K, across all major exchanges, as well as their liquidations in real time. Now we just need to see follow-through. I'm seeing shorts continuing to build though which means retail traders are trying to FOMO in at what they think will be the top of the bounce because they're all very emotionally bearish. Again, I believe these are over-leveraged, under-capitalized shorts which will provide fuel to move higher with just a nudge further upward in price. Overhead resistance begins in earnest at the $6800 box, however price must push through $6560 to even think about that box. I have noted the support and resistance areas on the 1H chart as well as provided the bigger picture via the 1D chart. Speaking of the latter, notice that StochRSI remains almost flat in oversold territory which, as I have been pointing out the past few days, should mean we will be seeing a reversal pretty soon. In terms of Wyckoff, I believe this to be the LPS. But that means we need to see a move upward from here to a new higher high (above $8500) in the form of an SOS to confirm it.
As always, I will be discussing this in greater depth during today's live streams at 10 a.m. CST and 9 p.m. CST and looking at various TFs. TV won't allow me to post the social media site where I will be broadcasting from, but it's easy to find so I am sure if you are interested in tuning in you'll have no problem finding me. Thank you for checking out the analysis. Be sure to follow us here and leave a "like" on the way out.
Shorts gapped on the 10 minute chart.