BTC/USD Decision Level - Will it go up (Repeat 2013)? Or Down?
Since BTC has broke resistance at $50k USD, the big question on everyone's mind is, will this bull run continue and repeat the double run of 2013? Or is this just a retrace before BTC goes lower? Here is my take of the chart action unfolding now ...
My take on why it might go lower:
- Smart money likes to take advantage of the holidays in the worlds largest economy, aka. Memorial Day in the USA. A common trick of Market Makers is to move the price one direction right before a holiday when markets will be closed for an extended period, only to whip the price the opposite direction on market open the following week. Reason for this is they want to trigger peoples stop-losses or buy/sell orders at common psychological numbers (aka $50k USD) and trap them in a bad trade causing the herd to panic and make irrational decisions come market open on Tuesday. Smart money can do this for a relative discount since volume drops off significantly right before (or in this case during) a Holiday, as traders go home early and are busy enjoying themselves and not watching their trades/accounts closely. If they do notice, they are locked into a bad trade because the market is closed. Now we all know Crypto never sleeps and can be traded 24/7, so things operate a little different here, but the same methods apply as less people will be active on their accounts during a Holiday weekend.
Smart money does this not just for the discount of breaking resistance at $50k, but also because they want to set themselves up nicely for Tuesday morning (Asia, London, New York Open). If smart money is looking to sell at this level they want to sell high, not sell low, so they move the prices higher before they dump their load on the market. They want to do this unloading during times of HIGH volume (aka when everyone wakes up Tuesday morning and sees their account and panics / rejoices) and not during times of low volume, like during the Holiday. If they sold during times of low volume, they would be selling into their own drop in price. It is also easier to do this once they have broken resistance, as its less likely for prices to break below $50k before smart money is done unloading their Coins. In other words, if they are dumping enough stock/currency/crypto to cause prices to go down, every-time they sold more, they would get less and less for it as prices would have declined because not enough people are buying their supply. This is not what smart money does. Smart money sells to weak holders at HIGHER and HIGHER prices, in anticipation of prices going lower after they are done. Smart money is always ahead of the herd.
As a (relative) small time operator, I always want to watch what smart money is doing, and trade with them, not against them.
Additionally, tomorrow September 7th is when El Salvador starts to allow their citizens to use Crypto from locally installed Crypto ATM's. Each citizen who signs up will get $30 USD in free BTC when they do. People across the internet on places like Reddit and other forums are encouraging users to follow El Salvador's lead and buy $30 in BTC on Tuesday morning. What would be a better time for smart money to be selling their BTC when MILLIONS of fresh users will be joining the blockchain releasing all that volume onto the market? Nothing like a "totally grassroots (TM)" internet bandwagon to offload your Crypto into. No one would ever manipulate the herd to do something against their own interests ...
Finally, the overall sentiment for BTC is HIGHER prices, so I would expect smart money to try and send the prices lower, absorbing the herds long positions in the process and triggering stop-losses, at least in the short term.
My Take on the market possible going higher:
With all that said, the overall trend of Cyrpto is HIGHER prices. So all things being equal, over a long enough timeline, prices will be HIGHER in the future if you look at the 10 year chart. With Bitcoin going mainstream and several countries adopting BTC as legal tender, the overall outlook on BTC is positive. If smart money was still looking to buy BTC during the Feb - May 2021 highs in anticipation of countries like El Salvador adopting BTC as legal tender, they would first have to drive prices lower so they could buy at a discount. When BTC was at $64k, everyone was long, so smart money and the market makers would have been buying at higher and higher prices against their own accumulation. They want to buy low and sell high, not buy high and hope for selling higher. Based off the charts, Smart Money considers $30k BTC to be "cheap," hence the buying at those levels.
I would not anticipate BTC to ever break support at $30k USD ever again barring disaster / market shocks (911, Delta, ect).
Additionally, Coinbase stock went live in April, and since the price of Bitcoin and Coinbase seem to be linked, Smart Money does not want to buy Coinbase stock at the IPO price. It would have been in their interest to drive the price of BTC down, and with it the price of COIN so they could accumulate stock. Don't put the "chart" before the horse so to speak. If you look at the COIN stock price, it also looks poised for a breakout after a long period of accumulation:
Its common for candles to triple or quadruple tap the support/resistance price before finally breaking through or being rejected and going lower, so a strong break of resistance here on high volume Tuesday morning would show that prices were really ready to move higher and leave $50k BTC behind (or in the case of COIN the $300 level). Important to note that COIN cannot be traded over the weekend days because it is a stock, and its price has not yet broken the resistance line. I would have expected smart money to have quickly broken resistance on COIN Friday afternoon to lock people out of longs, but since COIN seems to follow BTC, maybe they are waiting for BTC to make its move before they move COIN.
This was not the case in June however as COIN broke out first from $210 to $261 per share in anticipation of BTC moving higher in August. Then they both moved together for the August 3rd increase.
Conclusion:
- If the 2020/2021 bull run is over, and what we are seeing at $50k is just a typical harmonic retrace toward the high before lower prices, we will see the Tuesday morning open float to higher prices with low volume before being dumped at some point breaking $50k support. This will occur most likely after 1pm EST till close (wait till everyone gets their long orders in during the morning before moving the price down). If they are trying to absorb all that El Salvador and Reddit money, it may stay above the $50k support for a few days, maybe till the end of this upcoming week, or the start of the week after that with little volume action on higher time-frame charts. The entire country of El Salvador is not going to rush to the Crypto ATM's first thing Tuesday morning.
- If we are going to see higher prices and possibly break the ATH and beyond, then what I would expect to happen on Tuesday is a rocket ship of higher prices on medium to high volume, locking everyone out of the market who might think about going long. Watch the BTC price in the next few hours during the market open in Asia and London. I would expect to see the price move higher and higher during this time at a good pace on low or medium volume until Smart Money thinks it is go time. Go Time would likely happen after the first hour of New York open, then lots of wide-spread green bars on medium or high volume. If we do see BTC break support below $50k but only retrace slightly on low or medium volume, its possible this will be short lived fake break of support trying to catch the stop-losses of everyone who went long.
With all of that said, I'm leaning toward at least a short term rejection at $50k. I'm usually right on the market move long term, but my timing is often wrong. It's why I swing trade and stay away from day trading. If you haven't already made up your mind on which way its going, in my opinion, $50k is not the place to be doing it (you should have bought in 2019, or at the $30k support). So this is for educational purposes only and not meant as financial advice.
Since BTC has broke resistance at $50k USD, the big question on everyone's mind is, will this bull run continue and repeat the double run of 2013? Or is this just a retrace before BTC goes lower? Here is my take of the chart action unfolding now ...
My take on why it might go lower:
- Smart money likes to take advantage of the holidays in the worlds largest economy, aka. Memorial Day in the USA. A common trick of Market Makers is to move the price one direction right before a holiday when markets will be closed for an extended period, only to whip the price the opposite direction on market open the following week. Reason for this is they want to trigger peoples stop-losses or buy/sell orders at common psychological numbers (aka $50k USD) and trap them in a bad trade causing the herd to panic and make irrational decisions come market open on Tuesday. Smart money can do this for a relative discount since volume drops off significantly right before (or in this case during) a Holiday, as traders go home early and are busy enjoying themselves and not watching their trades/accounts closely. If they do notice, they are locked into a bad trade because the market is closed. Now we all know Crypto never sleeps and can be traded 24/7, so things operate a little different here, but the same methods apply as less people will be active on their accounts during a Holiday weekend.
Smart money does this not just for the discount of breaking resistance at $50k, but also because they want to set themselves up nicely for Tuesday morning (Asia, London, New York Open). If smart money is looking to sell at this level they want to sell high, not sell low, so they move the prices higher before they dump their load on the market. They want to do this unloading during times of HIGH volume (aka when everyone wakes up Tuesday morning and sees their account and panics / rejoices) and not during times of low volume, like during the Holiday. If they sold during times of low volume, they would be selling into their own drop in price. It is also easier to do this once they have broken resistance, as its less likely for prices to break below $50k before smart money is done unloading their Coins. In other words, if they are dumping enough stock/currency/crypto to cause prices to go down, every-time they sold more, they would get less and less for it as prices would have declined because not enough people are buying their supply. This is not what smart money does. Smart money sells to weak holders at HIGHER and HIGHER prices, in anticipation of prices going lower after they are done. Smart money is always ahead of the herd.
As a (relative) small time operator, I always want to watch what smart money is doing, and trade with them, not against them.
Additionally, tomorrow September 7th is when El Salvador starts to allow their citizens to use Crypto from locally installed Crypto ATM's. Each citizen who signs up will get $30 USD in free BTC when they do. People across the internet on places like Reddit and other forums are encouraging users to follow El Salvador's lead and buy $30 in BTC on Tuesday morning. What would be a better time for smart money to be selling their BTC when MILLIONS of fresh users will be joining the blockchain releasing all that volume onto the market? Nothing like a "totally grassroots (TM)" internet bandwagon to offload your Crypto into. No one would ever manipulate the herd to do something against their own interests ...
Finally, the overall sentiment for BTC is HIGHER prices, so I would expect smart money to try and send the prices lower, absorbing the herds long positions in the process and triggering stop-losses, at least in the short term.
My Take on the market possible going higher:
With all that said, the overall trend of Cyrpto is HIGHER prices. So all things being equal, over a long enough timeline, prices will be HIGHER in the future if you look at the 10 year chart. With Bitcoin going mainstream and several countries adopting BTC as legal tender, the overall outlook on BTC is positive. If smart money was still looking to buy BTC during the Feb - May 2021 highs in anticipation of countries like El Salvador adopting BTC as legal tender, they would first have to drive prices lower so they could buy at a discount. When BTC was at $64k, everyone was long, so smart money and the market makers would have been buying at higher and higher prices against their own accumulation. They want to buy low and sell high, not buy high and hope for selling higher. Based off the charts, Smart Money considers $30k BTC to be "cheap," hence the buying at those levels.
I would not anticipate BTC to ever break support at $30k USD ever again barring disaster / market shocks (911, Delta, ect).
Additionally, Coinbase stock went live in April, and since the price of Bitcoin and Coinbase seem to be linked, Smart Money does not want to buy Coinbase stock at the IPO price. It would have been in their interest to drive the price of BTC down, and with it the price of COIN so they could accumulate stock. Don't put the "chart" before the horse so to speak. If you look at the COIN stock price, it also looks poised for a breakout after a long period of accumulation:
Its common for candles to triple or quadruple tap the support/resistance price before finally breaking through or being rejected and going lower, so a strong break of resistance here on high volume Tuesday morning would show that prices were really ready to move higher and leave $50k BTC behind (or in the case of COIN the $300 level). Important to note that COIN cannot be traded over the weekend days because it is a stock, and its price has not yet broken the resistance line. I would have expected smart money to have quickly broken resistance on COIN Friday afternoon to lock people out of longs, but since COIN seems to follow BTC, maybe they are waiting for BTC to make its move before they move COIN.
This was not the case in June however as COIN broke out first from $210 to $261 per share in anticipation of BTC moving higher in August. Then they both moved together for the August 3rd increase.
Conclusion:
- If the 2020/2021 bull run is over, and what we are seeing at $50k is just a typical harmonic retrace toward the high before lower prices, we will see the Tuesday morning open float to higher prices with low volume before being dumped at some point breaking $50k support. This will occur most likely after 1pm EST till close (wait till everyone gets their long orders in during the morning before moving the price down). If they are trying to absorb all that El Salvador and Reddit money, it may stay above the $50k support for a few days, maybe till the end of this upcoming week, or the start of the week after that with little volume action on higher time-frame charts. The entire country of El Salvador is not going to rush to the Crypto ATM's first thing Tuesday morning.
- If we are going to see higher prices and possibly break the ATH and beyond, then what I would expect to happen on Tuesday is a rocket ship of higher prices on medium to high volume, locking everyone out of the market who might think about going long. Watch the BTC price in the next few hours during the market open in Asia and London. I would expect to see the price move higher and higher during this time at a good pace on low or medium volume until Smart Money thinks it is go time. Go Time would likely happen after the first hour of New York open, then lots of wide-spread green bars on medium or high volume. If we do see BTC break support below $50k but only retrace slightly on low or medium volume, its possible this will be short lived fake break of support trying to catch the stop-losses of everyone who went long.
With all of that said, I'm leaning toward at least a short term rejection at $50k. I'm usually right on the market move long term, but my timing is often wrong. It's why I swing trade and stay away from day trading. If you haven't already made up your mind on which way its going, in my opinion, $50k is not the place to be doing it (you should have bought in 2019, or at the $30k support). So this is for educational purposes only and not meant as financial advice.
Comment:
Pre New York open price action seems to indicate BTC is going to be down at least for the day, still a possibility of fake break of support. COIN stock price seems to indicate buying but its still early and I'm not seeing the volume I would want to see for a break of the $300 resistance. I expect both BTC and COIN to tell us for sure what its doing in the short term by, or shortly after, 1pm EST today.
Comment:
Also, Yahoo news is sending me e-mails telling me "El Salvador Leads World in Adopting Bitcoin as Official Currency." That's never a good sign. Smart money would never reveal their position.
Comment:
Looks like the slaughter has begun, with BTC dropping to $42900 USD, we will know shortly if this is a fake break of support, but its not looking good.
Comment:
The 1 hour BTC chart is showing a pretty severe wick bouncing off the $43000 level. I suspect this may be a flash crash to catch stops before moving upwards. Need to wait for the next few candles to close to confirm.
