Good afternoon all…Although I would usually do this post later on in the evening.
The current climate surrounding bitcoin could lead to some very interesting price action later this evening…
The USDC de-pegging is creating a lot of concern and articles are now coming out suggesting that Circles exposure may not be that bad…Peg, depeg, regardless…People being told they can’t do anything with their USDC is enough to grant concern across the board. Do you think people will take the time to really work out if this story with USDC may not be as bad? The luna story is still a sour one…Once bitten twice shy is the old saying.
So let’s get to it…
Of course, we have only a few hours until bitcoin can hit our projection of 19218…If it doesn’t happen tonight, well i will take what the price has done so far as a good projection for the books.
Now people are confusing bitcoins reluctance to move regarding this USDC story with literally no volume being transacted. It’s typical for Saturdays…But tonight is when we will see the truth of it…
Refer to the chart labeled – “Bitcoin Points Chart 8H”
1 – In this area of the chart we can see that the high-volume node is the largest before the main area of value. Look to the right of the chart and you will see the green vector candle…Notice how this is the area that started interest. So we assume if the price gets towards this zone we can expect a reaction…
“High Volume Node” – It’s a point of the price action which shows a higher-than-average volume
2 – Take this point of the chart and we have the highest area of interest in Bitcoin since it last moved from that zone to form the low of the year…This is the area where if bitcoin were to continue to drop…We would assume that the buyers would step in at this point…But we have to consider that the MM could induce traders to step in short here because traders would think given the news articles surrounding crypto then people would start selling…In this zone, we would expect bitcoin to snap up and shake retail traders out, before continuing to the downside.
3 – These two green vectors are where I expect bitcoin to return to…Solely on the news of what is happening with USDC…It’s ironic that all this is coming out over the weekend.
4 – Let’s assume everyone is running for shorts right now. Consider that at the price point of 21730 retail is going short and setting their liquidation zones in this region…Mainly the 25X traders and less. 100x traders would have their liquidity taken at least within the 50% range of the red vector candle…You can see that it has yet to be recovered or even hit.
Refer to the chart Labeled – “EXO CHARTS BITCOIN”
Now we are using exo charts to understand if bitcoin will likely drop from its current range.
Draw your attention toward the circled areas in the chart.
These are the bigger orders appearing at the highest point of this range…
Can one assume that this is the start of the sell-off to work its way lower?
If you look to the key to the right of the chart where the orders are circled you will see we are witnessing large amounts of bitcoin being sold at the highest point of the chart, suggesting, algorithms triggering sells for specific participants.
Now Notice that the delta below is showing very strong readings…This is at the highest point of this range.
So the longer they hold this zone, the more we are compelled to believe that the MM may mark the price up more from this point before they actually decide to drop it. Why? Because either people are buying up bitcoin in this zone on the belief of a retrace backup, or they are getting bitcoin cheaper…We are looking for a strong rejection of the highs of this range to agree they are starting to break down from it.
Refer to the chart labeled – “1H Bitcoin”
1- This is the 50% retrace of the vector candle taken from the 8HR time frame.
2 – Retracement back to the 50ema, shows an aggressive rejection from that zone, however somewhat controlled… suggesting another move up at least to take back the 50% retracement of the red vector could be on the cards…
Just consider how they moved the price up last night to come back down.
Can we assume that if we were to run shorts, we would wait to see if price works its way up and start preparing for a drop-down?
If the price were to break the 50% retracement of the red vector, a retest into it could suggest support, and a return back toward the previous week’s psy ranges could occur…Now all I am saying is it would take bitcoin a large influx of volume to come in to move it up higher given the news surrounding USDC.
People are in fear right now and their money is locked up and they can’t do anything…The only thing on their mind is “fiat” by any means necessary. That is what I believe…
3,4 – These zones where you see the vectors appearing is suggesting an area of interest where the MM didn’t want to make the price down further…Short-term support inducing buyers, which sets up the move up to come back down.
MACROS –
IF you refer to the “Risk On/Off” chart – You will see that retail and players across the board finished the week off with not favoring exposure across the board.
Now with that being said, let’s look towards our sentiment of smart money dumb money chart.
The smart money chart is showing the cross that we have been waiting for.
Now the reason this is important is to suggest that if smart money is going to bring the next wave of “buys” then naturally the blue line will cross over and head towards zones that make the retail confidence very pessimistic…which would imply the market is selling. (smart money buying)
If bitcoin is following the stock market, then next week’s data would suggest that the smart money is getting ready to run the markets lower and buy up all that is being sold.
Remember smart money doesn’t lose, they have too much liquidity and it can be exposed to wide drawdowns only because they know when to turn the markets. They are the liquidity providers, they decide what a bottom is…and a 20% correction in the sp 500 and most tech stocks being overvalued…Would suggest that smart money is not satisfied with the current discount on stocks…They want more.
Conclusion:
So is bitcoin going lower? I believe it will drop…
The only zone I can look toward is the value area from the zone that it moved from in January. Technically standing this is where value is at…
If we assume that during the psy ranges being established…I would expect the following:
Refer to chart “Psy range behaviour”:
Now take this with a pinch of salt…I am trying to bring awareness to how we can assume the price will behave during this time, which will be around 11PM GMT when the ranges start…
I am looking for bitcoin to go down…So I will assume they will move it up before that happens…
We are looking for bitcoin to form the psy high…Then come back above it but each attempt by bitcoin to move above the psy high will need to come in lower than the previous high…I would then be of the belief that the MM is building shorts above the psychological 20k range.
So my next zone for bitcoin to land is toward the 18500 zone before it forms a set of support before it then drops further toward the value area mentioned at the start of the post. MY PRICE TARGET IS 16486 (GREEN VECTOR ON THE 1HR) WITHIN A 1 WEEK WINDOW…
It’s all going to rely on people’s fear of the news that has come out.
P.S HOMEWORK
I have attached several charts for your personal viewing on bitcoins drop from the highs so you can go back and explore what was happening beforehand and the reasoning for the breakdown. The practise here is you will see bitcoin and other assets do the same thing…Remember it’s behaviour we are focusing on…Training the eyes is the goal.
Let’s see how it all unfolds
Mad Love
T
