Good evening all…
Its that time…where we break down bitcoin to work out what we can expect for the following week.
The first two images are taken from last weeks post which you can find here – https://www.patreon.com/posts/mm-tier-bitcoin-79202488
So far bitcoin is following the story of what we had anticipated last week. I would encourage you to read last week’s post to see how everything developed, especially in line with the macros that we mentioned. This will help you apply an approach that will build your confidence in projecting for yourself on different assets like Nasdaq or sp 500 and forex pairs.
But tonight’s update is going to be focusing on the smaller time frames.
Let me draw your attention to the image labeled Zone A on the 1Hour time frame.
You will see the chart shows Emas are stacked to the downside, suggesting that price is currently in the momentum to move lower….But mr market maker won’t make it that easy…Zone A is an area we can expect the MM to spike back up towards…Why? This move in bitcoin has been driven by fear over the Silvergate story.
Naturally, we assume, lots of people ran shorts…
The question is…How long will it take the MM to spike back up..? What if he doesn’t?
Where in the chart, would you be comfortable assuming that bitcoin would continue lower?
That leads me to the area called “Last Vector Zone”
On the 1 Hour, this is the last point of interest…Visually…we were can assume that the MM will return back to the vector…
It also happens to be the last point thaT Bitcoin moved aggressively up from.
So that grants the next question…If bitcoin recovers this vector zone in the 1-hour time frame, will it continue to move back up?
Refer to the next chart – Labeled “Value Seeking Zone”
In this chart, the only zone that bitcoin last consolidated from is where the volume profile shows a large area of interest. Now we assume at this point where buyers and sellers come into this zone and history tells us that buyers were in that zone because that is where price aggressively moved from.
So we have tow points in the chart that would suggest volatility.
Now you can simply say, “Im going short” and hope for the best.
However, I am drawing your attention to these zones because they are zones that will determine whether or not you close a trade or open a trade if it reaches those zones.
Ultimately its going to be down to your level of risk you can absorb…
If you are happy with playing the game of shorts then you will be aware that mr market maker “Could” spike price back up towards the big red vector labeled “Zone A” – Can you absorb the risk if the price moves back up towards this zone?
Remember in this week’s video on building shorts in one of the updates…
“If you are building shorts, you want to be encouraged to add to the short when it moves higher and not be concerned that you are exposing too much risk”
It’s a mindset shift. The lighter the risk, the more flexibility you have…The lighter the risk, you are focusing on execution as opposed to making money…If money is the objective, then you will risk too much and lose it quicker…
Refer to the next chart…”5 Minute Play”
This is during the creation of the psy ranges…
Now stick with me on this one…This is the time frame where we will see stop runs…
Look at how price has been wicking the lows…The last major wick on the 5m time frame is where we saw the absorption of longs being liquidated.
This is an area where fast candles can arise, so the V shape play could be on the cards in this zone. Those of you that know the V-shape play…Trade light.
If you are new to the Patreon, refer to the following masterclass 9 on V shape Plays
The Stop run region is an area we have to be careful of…Bitcoin has not tested its daily open and if we look closer on the 5 m time frame you can see red vectors yet to be recovered. So we assume that if it finds support on the Psy ranges then we can anticipate a stop run towards the daily open zone.
Again…you play shorts…Trade Light.
The 12hr Hyblock chart is suggesting That there is 148m Short liquidations at the 22425 zone. This is consistent with the “Stop Run Zone” on the 5 minute chart we were referring to.
The 7 Day chart is showing 3.63B Long liquidations at the 21200 zone…This is consistent with the “Value Seeking zone” that we marked off above where most of the traders in that zone were longs.
So to summarise…
Do I believe bitcoin is going lower? Yes…I am 1 week away from my projection from last week to hit the 19218 zone. This is on the first image attached above to this post.
Ultimately…we agree that an influx of sells have hit the marketplace out of fear. Remember, MM obligation to the exchanges is to be available to allow a smoothness of price action by providing liquidity to allow trades to get their money in good or out.
The only way to invalidate my projection of 19218…Is if bitcoin breaches the peak formation at 24800…
If bitcoin gets back up towards the level 1 zone refer to “Levels Charts” which sits between the 24013 and the 22754. Then we have a change in sentiment and my projection would take longer.
I hope this isnt too much to take in…
Will be checking in tomorrow for the FX/Indices breakdown…