Good evening ladies and gentlemen….
A late update but price has not been doing to much but it’s safe to say we are going into a very interesting week…
So bitcoin on the volume profile is showing two points of interest where volume is apparent within this current structure…
The first chart we are referring to is the 8HR time frame of bitcoin…The logic suggests that this is where price will “activate” interest from buyers and sellers…Now we know that the MM operates in these areas.
So if the price comes towards these zones, your goal is to be aware of “how” the price gets to these zones…
What do I mean?
Vectors…
You are looking for the attempt by the market marker to get busy toward these areas of interest in the volume profile.
Now draw your attention to the 1HR time frame.
We are seeing something interesting happening. Notice the yellow arrows marked on price at the 200ema…Then look below and notice volume has practically disappeared…As price drops, so does volume, however, price ends up higher as it closes…
What does this suggest to us?
One would assume that Bitcoin is going to try and make a move higher…
What do we need to see?
Refer to the image labeled “The Ranges Of Interest”
A couple of things to consider:
1) The two red arrows that are around the 26132 and 25546.
Inside this zone you will see a stopping volume candle that is violet…It is a small retrace area…
If bitcoin drops from the current point, I would expect price to find support at this area, However, the support may lead to lower prices if the 50EMA is still above price.
This leads me to the next zone…Where I have labeled the “POC” which is the Point of control. If bitcoin invalidates the current zone and drops below the 200 ema…Then this will be the market maker trying to shake out the guys who are holding on to this zone hoping that price holds “their longs”
Remember, The fact that the price is still below the point of control and trading below the 50EMA still suggests that we are waiting for movement.
Now the 5 Minute strategy tells us that we must wait for the first attempt by price to break away from the 50 ema…
As it stands right now we have a balance.There is no movement and we are anticipating volatility to come in.
If and only if, bitcoin breaks below the 200 ema, I would expect a red vector to appear and head towards 26639. This will break the low that created the big red vector candle that first tested the 200 ema on the 1 hour.
Consider the liquidation levels chart…You will notice i have marked off two areas in the chart.
The Red arrow is where there were many shorts triggered and have now been liquidated on the move back up.
Logic suggests that price will return towards this zone and break through because that is where the MM “triggered” most of the retail traders to step in towards that zone.
This is what we are looking for…”where can the MM get traders to buy and sell”
The Red X is where most of the liquidations of longs is currently available for the MM to attack. As it stands there are 244 short positions and 95 long positions (liquidations)
But price is trading lower?
This leads me to one conviction.
A big drop lower may occur first before bitcion starts to come back up…Again, until they get above the 50 ema on the 1hr time frame, we are biased towards going short.
What we have to consider also is that if the 50ema ends up being flat, we are then waiting for the first move either above or below and wait for the retrace, continuation in that direction. (Refer to Retrace Test Zone chart)
The bitcoin Optix chart is showing us that they have yet to move price towards a zone that would suggest traders are optimistic or even pessimistic…
By the logic of this chart, we assume that investors are heading towards an area of “pessimism” which means that prices will continue to drop to get to a zone of extreme pessimism.
The Smart Money chart…We know that bitcoin is still following the stock market.
The smart money chart is suggesting that SM is edging upwards which could suggest short-term movement by assets to the downside…This means that if the Blue line is going up, it means smart money is selling into retail, when it’s turning lower it means smart money is buying…
Now we are at a critical point in the smart money chart where reversals are due to happen…If the blue line turns lower it means smart money is selling which means assets will start rising.
So to finalize…We must approach the charts with the logic of the 5-minute strategy…We are waiting for a movement by bitcoin…This is what saves traders from making, or getting themselves caught up in trades they are “hoping” will work.
Once we get our first bout of volatility, that is when we come to the charts and start our hunt for future movement, more so, confirmation that the first move that happens is either a false move or the start of the true move.
Let’s see what happens by tomorrow night…
Tomorrow I will be doing the Forex Update and The indices…
Mad Love
T
