Prediction and Discussion: BTCUSDT & The New Pump

Overview:

We have recently seen this new pump enter into the price action of BTCUSDT. This pump has several important features that show us the underlying structures at work within the market.

We break the daily chart down into rectangular regions that indicate a form of behavior that identifies sentiments present in the active trading for those specific time frames. You can see these rectangles are labeled with letters which each indicate the period under which the sentiment phase is present. For this prediction, rather than relying on traditional indicators we are working to develop a better understanding as to the nature of pumps and how they are effecting the near term future prices of interest to day traders.

This pump is of importance because it has reached a higher high than the last wave up for BTC, which is the first time that this has happened since the compression down from the All Time High of 2017 / 2018...

Price Prediction:

Within the next 7 day period we expect to see BTC return to trade at a 7000 level.
These motions are to be considered in their potential effects in the Altcoin market.
However that discussion is saved for another time.

Discussion & Rundown of the Rectangles:

We have labeled several rectangular regions. The main focus of this discussion is upon those regions labeled W, P.1 & P.2

Of first consideration is the region P.1

This region represents the expressions of a specific type of trader in the market, jokingly labeled P for Plebs.
In this band of activity we consider that most of the trading volume is coming from smaller bag holders. There is hesitation to call them "retail traders" although this term does serve to help grasp what we are looking at. In this P.1 region we see what is the net "potential of market movement" that this category of traders can have in a given time frame. We break down sentiment motions within that band by further rectangles, A B C D E F G... Since we are dealing with an asset that is almost purely speculative in it's nature it is important to note that tracking sentiment as though the asset were performing an economic function outside of pure speculation can lead to incorrect assumptions about the nature of price movements. Although we can point to history to demonstrate to us trends from other assets and periods in the "traditional market" we take a position in this discussion that there are novel features to the activity of BTC that relate to yet unrealized economic affects.

With this understanding we can consider that different levels of traders trade in different ways, which on the surface is obvious but the details are yet to be fully articulated.

This leads us to our next rectangle of consideration, W

This rectangle is assumed to represent to us the power which large bag holders can have, so called Whales. We have to consider that the whales of BTC are not the types of traders who obsess upon smaller time frames but that their holdings require by nature for them to scale with time in ways that smaller holding amounts cant. In general this breaks down into considering larger time frames and that opportunities exist within the "noise" between these larger moves. It is important to note also that whales compete with each other.

No doubt whale traders participate in the "noise" trading of the P region, and indeed many of these sentiment motions are in part created by larger bag holders bringing specific types of influence to the market, however as a general rule the "Plebs" rule the P region.

Now thirdly we consider P.2

P.2 is a clone of P.1 and given as a type of ghosting as to the potential swings that BTC can make from it's current position at the time of this writing. We use this as a visual aid that allows us to formulate a type of qualitative risk. However, this can be further broken down quantitatively.

The rectangles A B C D E F G each represent a type of "sentiment phase" which is experienced during the general noise behavior of the Plebeian trading. For now we will leave a detailed breakdown of these out of this discussion but they are highlighted to show the role they play in the construction of the P rectangular region.

With these considerations all in place we can make a prediction that baring any type of "whale battles" bringing us an extreme drop downwards that the P rectangle trading band will be followed with high probability.

Being that this pump actually breaks the high of the prior wave up for BTC, which has not happened yet and It has the highest daily volume since April, we consider that after a period of "consideration" that BTC will, for a time, return to a 7000 level sometime within a 7 day period.
Due to the extreme volume of this BTC pump and the generally strong nature of Alts lately to move despite the action of BTC, we see a near term bolstering of Alts bull sentiment entering into the market which will markedly hasten by any motion of BTC back towards a trading level of 7000.

On closing note we must remember that there is still a very strong sentiment among several traders to see BTC return to a level below 6000. We cannot discount these players looking to make moves that will take advantage of this BTC pump to find ways to bring the price down. Additionally, we feel that we have entered into a new market phase where the compressing wedge that has been happening over the last year has ended and we are starting to open up. Even if we experience a deep drop the potential sentiment to return us to our current level, the 5500 - 6500 level is a very strong support for BTC due to many reasons beyond sentiment of traders.

Good Luck in your Trades Everyone!

Comment:

Keep in mind that recent FUD surrounding USDT leaves anyone holding large USDT bags feeling a strong desire to clear them out regardless of price. This may be a reason for the pump for anyone interested in speculating why.