We have two days from previous analyzes for Bitcoin (BTC), where we showed that the market structure at the time looked like one of the variants of Wyckoff’s distribution scheme. However, the scheme was invalidated when the rising wedge rate broke. One thing was confirmed to me, and that is that the market is now under the control of some intelligent entity – most likely a large group of institutions.
The big players go “upstream”
This is not the fault of retail, because it behaves mainly emotionally, as is clearly shown on the screen. These fresh price movements are not chaotic in any way, but they do not make sense in the context that all time frames are extremely burned out. The daily RSI even managed to break the double bearish divergence within the repurchased area.
That big players operate in the market is standard, but they rarely go against several divergences over a high time frame. It’s like swimming against the current. However, I would like to return to that picture – one now sees similar texts to a large extent in “Czechoslovak” and foreign groups. Again, everyone is showing their crypto portfolios and “advising” what else to include.
Even if we completely omit the technical analysis, I last observed this extreme FOMO at the beginning of 2018, and everyone should be surprised that we are close to the finals (at least for a short time). Even the biggest moonboys calculate with correction. Otherwise, the market cannot even function – without correction, the possibility of new investors entering the market is absent, which means that demand will be depleted even faster.
Current situation on 3D TF BTC / USD
We start with a three-day time frame, where we see a breakdown of the S / R level of 17,163 USD. The breakthrough of that level was quick and terribly easy, which makes me cold. I repeat that the parabola can collapse with the snap of fingers as fast as it formed. Basically, it now depends on the intelligent entity that completely controls the market. If they decide to let it go, it can fall like a stone.
The first level on the way down, where more demand can be expected, it is up to about 12,000 USD. Which would mean a decrease of about 35% from the current price – a completely normal drop as part of a deeper correction in the bull cycle. But according to Volume profile je value area high u cca 10 000 USD. So there is a possibility that even the $ 10,000 will be retested, because the exchange rate tends to return the price to the value area.
However, a drop of up to $ 10,000 from the current price would mean a drop of about 46%, which is enough. Of course, this is also realistic, but personally I would be inclined to say that the 12,000 USD will be defended if the exchange rate falls here. It is also needed to test a 20-week moving average that worked as a reliable support during the previous bull run.
As for the nearest resistances, apart from the annual pivot of R2, there is not much left. The market can still respect all time high as price resistance, but that’s all. It’s pretty incredible that Bitcoin moved forward so fast. However, the biggest current question is which levels will play the role of reliable support.
Indicators
RSI values have already reached 90 points – when the market was around this number, a dump almost always followed. In 2013, 99 points were attacked twice, but at that time the market was in a quite different state. The market is already attacking the summer numbers from the previous year on the MACD. Maybe we will see a double top on the curves of the indicator.
Current situation at 1D TF BTC / USD
In the daily time frame, one sees in more detail the whole rally, which has been going on for almost six weeks. The slope of the trend is too steep and therefore the correction will most likely have a steep decline. We can expect that $ 12,000 during the week, and then it may take a few more weeks for the price to return.
Indicators
I was very surprised, though broke the dual room divergence on the RSI. At that moment, it was clear to me that the market was under the strong control of someone strong. Rarely does one witness that double bearish divergence is invalidated under current conditions. Double divergence is only on the MACD histogram, but without a bearish cross the signal has no weight.
Current situation at 4H TF BTC / USD
At night, there was a quick dump, which was largely withdrawn by shoppers during the morning. Do you see that long wick down? This can easily happen to a much greater extent. We are in price relations, where the liquidity is lacking, and if anyone decides to sell more, then the presented price action is nothing special.
On the other hand, we know that the S / R Level was defended by $ 17,169 buyers, so we know that the level can probably be calculated as potential support. However, it was too fast – if we want to be sure, consolidation is needed. As for the distribution scheme, it was invalidated by the opening of the upper wall of the drawn wedge.
Conclusion
I personally consider this to be a retail trap that wants to jump headlong into that dish. In short, the rich will gossip with the poor, as is the custom in history. Unfortunately, retail investors are largely to blame for this – emotions should not have a decisive influence on investing.
It’s really hard to say where we stop now. The market is terribly well-trodden and the individual sell signals are interpreted as matches. Until the institutions want to let go of the prize, they will keep it up. There is nothing stopping them from doing so when there are no sellers, which could change for $ 20,000.
At the end of 2017, a lot of investors fell into a trap and then they were so upset that even now they may not be interested in a bull run and they prefer to get rid of their bitcoins at the break. Unless, of course, they sold for a long time at a loss.
ATTENTION: No data in the article is an investment board. Before you invest, do your own research and analysis, you always trade only at your own risk. The kryptomagazin.cz team strongly recommends individual risk considerations!
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