I bet you didn’t know where Bitcoin was headed until THIS!
Being a trader is not about being right or wrong, but about the probabilities. Today’s momentum will not be the same as the momentum tomorrow. We must understand that the market is dynamic and what is forecast on the chart is not absolute, just as weather predictions are not always 100% certain. With that being said, it important to always look at both sides of the market to remove any emotional biased that may affect our attention to detail when analyzing price predictions and movements. Following on previous updates related to this idea, my “Ultimate Bear Trap” is no longer in play, having broken the key 5.2 support level of the previous trading range. Any bullish market structure is therefore broken and any deviations are reaffirmed to be correct based on the previous price actions.
Since many of you reading these are new traders, I will try my best to clearly explain all of the technicals. If you have any questions or are confused about any part of my analysis, please ask them in the comments and I will answer and include them in my updates.
https://www.tradingview.com/x/ya9b30U1/
To begin my global analysis, these rectangular boxes drawn on the chart above are the key levels that I am looking for in terms of support/resistance. What I am looking at here at previous weekly ranges that would act as good layers of support. To the right of these charts is the volume profile, which is marked with red “X”s that shows very large volume gaps. Typically in a market where we move “too fast”, we tend to skip over price levels during a breakout. During retracements, what we will typically see is a “volume fill” to retest these skipped price levels to reconfirm these prices. After these volume fills, what we will typically see is whether or not these retested price levels are worthy of being at this level. If they are not, we will simply go lower and test the next volume gap (like falling through a pile of bricks until one level of brick decides to hold).
Currently we are at the first orderblock support which is the current level being tested. If we break below this level then we will simply fall to the next orderblock (like falling through a pile of bricks). If we close daily below 4.1k, then expect us to fall to the next level at 2.5k — 3k. And if we fall below 2.5k, expect as low as 1k — 1.2k for the next layer of “bricks” to hold as support. However be aware of “fakeouts” (Search up “TD Breakout Qualifiers”).
https://www.tradingview.com/x/OtS456J3/
On the daily chart, this looks like we have a lot more room for downside. I would expect **at least** another 2 weeks of downside or sideways chop before seeing any major temporary reversals swings. Since we have broken market structure, this looks like the very beginning of capitulation of the bear market cycle.
https://www.tradingview.com/x/ITUMtX7I/
On the H4 chart, we had a very nice bounce off of the TD9 candle (look up TD Sequential if you are not familiar), however that got sold down quite fast. Seeing how fast we got sold down on that bounce, this is a good indication of the current bearish pressure that we are seeing in the market and for more to come. I am not expecting any bounces to 5.8k or 6k yet given the current price action and selling pressure. We do have some very nice bullish divergences on the RSI, but since this is a bear flag, do not expect this to indicate any signs of reversals. We may see a few bounces here and there, but once the RSI resets to 50–60 RSI (or 40 if we are very bearish), it is likely that we will see the next major move down.
https://www.tradingview.com/x/Y1kQgkKs/
This hourly chart is currently what I am watching for predicting the next swing move. At the moment we are trading below the 4489 EQ (equilibrium) level. (To calculate the EQ, simply take the midrange of the first swing after the major move). Since we are trading below the EQ, it shows that bears currently have control of this trading range. It looks like we will range between 4k and 4489 for a while until a further move is decided. This is a very good scalping range if you place your orders above/below the previous high/low where stops are likely placed and hunted.
https://www.tradingview.com/x/VhE39RUv/
On the 15m chart, we had a pulse signal that fired towards the upside taking out those 4431 stops at the previous high of the bounce. However we failed to break and close above the 4489 EQ level. We got a very nice rejection right off of it. I am expecting a move below 4179 now to run those stops.
Conclusion:
I have no bullish/bearish biased at the time since we’ve broken below my 5.2k key level to remain bullish. I will keep on posting updates on what I see for the next swing, as predicting longer-term swings become less accurate as we look further out into the future. If we break and close below 4.2k on the hourly (or any higher timeframe for a higher probability confirmation), then expect to see a drop to 2.5k — 3k.
As for the bullish side, look for at break and close above 4.5k on the hourly (or any higher timeframe for higher probability of confirmation), for a retest of 4750. If we break and close above 4750 on the hourly, we may get that 5k — 5.1k retest which may be a good short entry for further downside.
And as always, trade safe, don’t be greedy, and always manage risk :)
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