Bitcoin (BTCUSD) should fall with other stock markets shortly
Appart from the energy crisis in EU and property bubble in China, on 3rd November US FED will make an announcement regarding US interest rates. There is very high likelyhood it will go up from 0.25% to whatever percentage they feel is necessary. This is because US can no longer combat the hyperinflation, which is at record high for the last 13 years, currently at around 5.4%-5.7% and FED forecast it to go down to 4% by summer of 2022.
The key point here is - an increase in interest rates will have a negative effect on all the stock markets including bitcoin, which is currently very much correlated with them. Everything is going down!!!
According to COT (Commitments of Traders), in the last week, the big funds have increased their short positions by 20%, while small independent traders (hamsters dreaming of $100,000 bitcoin holy grail) increased their long positions by almost the same percentage.
On 21 October, some big whales tested BTC support levels - Binance US went down to $8,700, meanwhile Kraken went down to $54 100, and FTX went down to $58 500.
On 25 October over $2.3 billion worth of bitcoins have been taken out of exchanges. Usually when crypto is taken out of the market it suggests that investors realocate their crytpo into cold wallets, because they expect the price to go up. However, this is also done by the exchanges, who simply realocate funds as a barrier against a hactic sell off - especially after what happened on 21 October and a similar crash on gas futures from $1900 to $1100.
Other than that, BTC has been well oversold. On 2H BTC it's slowly forming head and shoulders. Also, there are at least 5-6 major SLs on the way to $45,000, against 1 SL above $67,000. Market Makers tend to go where most money is allocated and that's your SL.
The key point here is - an increase in interest rates will have a negative effect on all the stock markets including bitcoin, which is currently very much correlated with them. Everything is going down!!!
According to COT (Commitments of Traders), in the last week, the big funds have increased their short positions by 20%, while small independent traders (hamsters dreaming of $100,000 bitcoin holy grail) increased their long positions by almost the same percentage.
On 21 October, some big whales tested BTC support levels - Binance US went down to $8,700, meanwhile Kraken went down to $54 100, and FTX went down to $58 500.
On 25 October over $2.3 billion worth of bitcoins have been taken out of exchanges. Usually when crypto is taken out of the market it suggests that investors realocate their crytpo into cold wallets, because they expect the price to go up. However, this is also done by the exchanges, who simply realocate funds as a barrier against a hactic sell off - especially after what happened on 21 October and a similar crash on gas futures from $1900 to $1100.
Other than that, BTC has been well oversold. On 2H BTC it's slowly forming head and shoulders. Also, there are at least 5-6 major SLs on the way to $45,000, against 1 SL above $67,000. Market Makers tend to go where most money is allocated and that's your SL.
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Check out 1W timeframe on BTCUSD. You will see a clear red pin bar. More importantly there is a clear divergence on RSI (starting from 4 Jan 21) against the current market price. The divergence is also confirmed by MACD (starting from 12 Apr 21).
This suggests that BTC is fairly likely to go down towards its $52000 - $53000 support level.
This suggests that BTC is fairly likely to go down towards its $52000 - $53000 support level.
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BTC Moving averages crossed on 4H. Finally!
The neckline of H&S was broken on 28-29 October. The formation of H&S was so obvious that every shortist tried his luck. As a result the price shot up to 62900 USD to get rid of smart ass shortists SLs and give bulls more confidence in their flight to the moon.
Also CME futures contracts expired yesterday as well. If one is to study the behaviour of BTC after the expiry date of CME, at BTC highs the price usually goes up a bit the next 1-2 days and then the trend changes and the price falls.
Appart from an obvious support line at 52000 USD based on horizontal voulme, the Bat harmonic pattern on 4H also confirms a good entry point to go long at around 52000 USD and as a second entry at 48000 USD.
The neckline of H&S was broken on 28-29 October. The formation of H&S was so obvious that every shortist tried his luck. As a result the price shot up to 62900 USD to get rid of smart ass shortists SLs and give bulls more confidence in their flight to the moon.
Also CME futures contracts expired yesterday as well. If one is to study the behaviour of BTC after the expiry date of CME, at BTC highs the price usually goes up a bit the next 1-2 days and then the trend changes and the price falls.
Appart from an obvious support line at 52000 USD based on horizontal voulme, the Bat harmonic pattern on 4H also confirms a good entry point to go long at around 52000 USD and as a second entry at 48000 USD.
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The most recent COT report for Bitcoin shows that:
1. There is a huge divergence between Open Interest that is at it's maximum peak and Net position of Large Speculators, who increased their short position to 4412 contracts this week. Incidently, this is the greatest number of SHORT contracts in the last 3 years so far. Even in April 2021 when Bitcoin was at it' peak, Large Speculators had only 2272 SHORT contracts in Net position.
2. There is a huge divergence between Bitcoin price and the Net position of Large Speculators as well. The divergence took the form of an inverse wedge.
3. Meanwhile, the crowd (Non-reportables) increased their Long Net positions to 3829 contracts instead.
So Large speculators are going in the opposite direction of hamsters. You can see where this is going! Judgement day is coming 🤣
1. There is a huge divergence between Open Interest that is at it's maximum peak and Net position of Large Speculators, who increased their short position to 4412 contracts this week. Incidently, this is the greatest number of SHORT contracts in the last 3 years so far. Even in April 2021 when Bitcoin was at it' peak, Large Speculators had only 2272 SHORT contracts in Net position.
2. There is a huge divergence between Bitcoin price and the Net position of Large Speculators as well. The divergence took the form of an inverse wedge.
3. Meanwhile, the crowd (Non-reportables) increased their Long Net positions to 3829 contracts instead.
So Large speculators are going in the opposite direction of hamsters. You can see where this is going! Judgement day is coming 🤣
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Although yesterday Mr. Powell decided not to icrease US rate and leave it at its current level of 0.25% , he did say that FED will reduce its bond purchase by 10 billion. This means that there will be shortage of liquidity, which supports SHORT position still.
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52000 target has been reached as well as liquidity level at 44000 as was shown on TA.
