Good evening all… Tonight’s update will explore Bitcoin and going into tomorrow night I will be completing a breakdown of EURO GOLD US30 SP500 NASDAQ USDJPY and GBPUSD in tomorrow night’s update.
It goes without saying that the next biggest move for bitcoin will be the FOMC, then non farm pay rolls, then apple and google earnings.
You can safely assume that the volatility going into next week is going to be massive.
So we are going to explore possible scenarios with bitcoin and what we can expect to happen.
Bitcoin – Daily Time Frame Volume Profile chart:
In the chart attached Pay close attention to the volume profile.
Notice how we do not have a clear-cut commitment of volume other than the lows which sits at the 17k zone… and then between 21 -19k.
When volume is spread like this, it shows the volatility of the move and people are indecisive as to whether they take orders at specific points.
These are zones we need to pay close attention to.
Now with volume profile it’s all about how the market searches for value. As you can see towards the top side of the volume profile you can see very few volume nodes with the largest in the top range at the current price point of the 23030 zone. When the market searches for value its really sending price to places they can induce traders to commit. The longer they can spend time in zones of commitment, the bigger the volume profile will appear and will be a valid point they can come back to when they move away from it.
So one would assume that Bitcoin has a number of zones it can go to.
Which is it?
The lower region or the higher region.
But what about Twitter?
Everyone is on anticipation that 25BPS is what is going to be declared in terms of interest rate hikes. The market may have already priced this in.
The next few charts will show you the likely journey during FOMC.
Now let’s go back to last week’s picture…Where do we sit? Seems like we are still in the MM zone of manipulation and we are yet to take out those important wicks to the upside?
The next chart is what we can anticipate before FOMC on Wednesday
Then the likely journey during the press conference. GVC stands for Green vector candle RVC red vector candle.
We already know that 25BPS is the assumed reading. So the market has priced that in, but what they have not priced in is what Powell will say during the press conference.
IF he remains more Hawkish, even aggressive, then the market may decide to pull a switch and rip back down.
Given the current move up has everyone thinking, happy days in time to grab stocks, its one to be cautious of.
When it comes to FOMC…Anything can happen yet this is the one time the market maker has a passport to pull the worst he can and take everyones liquidity who is still on the greed scale.
The risk on off chart shows that Risk is overly optimistic.
The next chart is the smart money confidence.
Now if you look at the chart i have drawn red circles at key points.
Focus on the first two red circles back in sept 21 This was during the markets move higher and the smart money was selling into retail towards the highs. You can see how they really manipulated price towards those zones with the smart money line (blue) showing aggressive moves up and down.
Move towards the net two red circles that are higher, this is where they are adding to longs and then taking profits on them.
Now we have the current point where i have drawn what i think will happen during FOMC, we have not even mentioned non-farm pay rolls.
I believe that Smart money, given that it has been selling off for some time now may induce another move higher which would bring the smart money line (blue) lower and instantly reverse as it has done before.
Retail money (dumb money) is extremely optimistic and smart money appears to respect this zone its currently in (look at my failed attempt at drawing a straight line)
So what can we expect from Bitcoin then?
The only thing that will lead bitcoin higher is people’s optimism. Will the FOMC fulfill this and set everyone up for NON-farm payrolls?
If you were a market maker would you use FOMC to really make a profit on retail or move it even higher? We can never think the market is too irrational, but we know human nature can, and once retail gets the green light, money will come pouring in and send everything higher.
How can tesla move up so aggressively…Who on earth is selling that much stock? not whos buying?
In my opinion, I believe FOMC will trap a lot of traders and take everyone by storm.
Something about this FOMC has me thinking they will pull the dirty and drop 50bps.
If they do…Markets won’t like that.
But it’s the press conference. Powell will be very careful with his words to keep people in trades and speculation.
IF the price continues higher then ladies and gentlemen, we would be going into the Trifecta and people will just be blind buying anything that has three letters as a ticker symbol.
Once FOMC is out, we have a better view of how likely bitcoin will return to the green vectors. Because frankly…I believe they will.
Mad Love
T
