Good Afternoon all…I hope you are well today.
So…Bitcoin’s new monthly candle…Already trading negatively…Where does that leave us? Well in this post I am going to draw your attention to extremes of cycles and dive into a few structures that have caught my attention…
I will also show you a few altcoins that are creating 5m structures, I have chosen alts that are moving similar to eachother, reason being is they are mimicking eth and have lots of liquidity trading behind them.
Let’s Roll…
1) Monthly Candle Image: So at a glance, we can see that bitcoin has managed to recover 50% of the red vector zone on the monthly candlestick chart.
As of now, bitcoin is trading negatively…
The question is…Is this the point where bitcoin recovers the green vector? Or are we on for the bull run sentiment…?
2) I want to draw your attention to the 7hr chart labeled “BTC 7hr Structure 1″…This was when the price traveled up 46% from the low at around 33k. Look at the recovery of vector candles…(Red Arrows)
3) Refer to Chart “7hr BTC Structure 2” – Bitcoin moves up 43% – look at the vector candle recovery zones…
4) Refer to chart “7hr BTC Structure 3” – Bitcoin since the lows of around 16k jumps up 54% and recovers 18% to then make another move up of 50%…
What can we understand from this?
Can we be safe in the knowledge that bitcoin is likely due a retrace? Does it seem that every time we have an extended move, we anticipate a recovery of particular areas? (three red arrows towards the end of the chart)
Now this is the 7 hour chart that we are making these assumptions…Now let’s zoom out slightly.
Refer to “BTC Daily” – Notice the blue shaded areas, where price has reacted at these zones.
Given that bitcoin has climbed ever so aggressively higher, yet not been able to take out that key 30K region.
Does it mean it won’t?
Well, the momentum that has been witnessed by the market in the last week has caught everyones attention to the idea that everyone is now bullish…Perfect time to reverse in my opinion.
Refer to the chart labeled “4hr BTC” – Notice the two areas i have made reference to. The high volume node within the value area high. (We consider this zone prone to reversals)
Then the HUGE Volume node at the point of control…
By the logic of the hybrid, we assume that Bitcoin will recover back towards this zone to grab the same interest (support) from traders who initially stepped in at this point…MM would have successfully recovered his shorts if he returns back towards this zone.
If we go into the 1hr time frame chart REFER TO CHART “MM STRUCTURE” We have a number of scenarios that can come into fruition.
So lets assume everyone is Bitcoin hyped…They expect the 30K zone…Lets, take that psychologically…Would it not be in the interest of the market maker to come towards 30K first? Because everyone thinks bitcoin is extended but has promise to go up?
Draw your attention to the MM Zone of interest.
If he can mark the price down towards this zone…(You are looking for price to remain below the 50EMA whilst it starts the breakdown) Would that not install, in the eyes of short sellers “Yes bitcoin is going to drop lower”…”We caught the top”
Logically, we would think so…The only way we would be comfortable running shorts is if bitcoin does break down below this MM zone of interest…Why?
Refer to the liquidation chart labeled “Liquidation Cluster Zones”
In the image you can see i have marked off an area labeled “1” – This is a cluster of shorts that are currently open…Notice the dark blue zone…There is alot of margin in there…
Next, Zone 4…Same story…Lots of long liquidations…Lots of margin there too…
hmmm
Zone labeled “3” – I only see one cluster of buys in that area…
Zone labeled “2” – I see two purchases of shorts.
So that leads me to the following:
What is the MM trying to achieve?
Remember, he has to induce before he can distribute (make a return)
He has to start moving price lower to build longs, and higher to build shorts…
“Ok Tino, enough of the chat” what do you think will happen?
I expect the market maker to keep marking prices up only because he has managed to make retail traders believe that bitcoin cant go up and we are overly sold….But that’s the thing…At what point does the chart tell you that?
When the momentum starts…
If you look closely on the 1hr time frame you will see a red stopping volume candle…
This gives me the insight that bitcoin will return towards this area because it is showing that retail are fighting with the trend, so the mm is hitting those shorts, which is why you see price drop aggressively, then come back up instantly…
We are looking for the first aggressive red vector at the highs as opposed to one that appears as price is dropping because we naturally expect them to recover that…
MM will always start the sell-off at the highest point…
You will see this happening on the 5m time frame…
So wait till the 5m strategy criteria comes into play with the first move way from the 50EMA…
In my opinion…If bitcoin cannot succeed above 30K then we are aggressively coming back down…because they seem to be holding above the 28500 zone but not taking out the 29k…
News play this week will decide if our story for bitcoin above will play out.
I hope this was not too long…
Tomorrow it will be FX/indices breakdown
Mad Love
T
