Market update - Week 31: Now that everyone is bullish…
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Hello again, welcome to another weekly bitcoin update. We discussed our longer term view in yesterdays monthly outlook (linked below). Now let’s look at the more immediate future, and how we can get positioned in the market.
Weekly
We talked about the weekly chart yesterday in a greater detail, so we’ll keep it brief here. The link to yesterdays post is at the bottom of this update, be sure to check that out.
The only things we’ll say here is:
We’re coming up to the weekly kijun, setting us up for a bearish kijun bounce. As we discussed yesterday, this is not only the area of the weekly kijun but a zone of (multiple timeframe) confluence of many resistances.
We had 2 huge weekly candles in a row, in a bear market. Many will shout at the top of their voices that this is bullish, and it is the end of the bear market. That makes us even more confident it definitely isn’t. We view it as a a sign of tremendous weakness: fomo traders blindly entered the market after a short squeeze, resulting in the second big positive candle. Fomo traders aren’t smart traders, and their hand is usually weak: They will probably panic sell as fast as they fomo bought. And this means that when the price starts dropping, it will drop fast.
We got in the those candles up, and out near the top. We’re now in a strong position, waiting for the market to show us a sign of collapse to get in short. Again we must not jump the gun here: we’re still in a range, and have a possibility of another way up, squeezing all the shorts who weren’t positioned correctly.
Let’s view the daily chart for more detail
Daily
This is where the action is, and there’s a number of things going on.
Firstly, we can see chikou and kijun attempting to break out of the kumo within the next few days. Second, in our big weekly box of resistance, we;ve narrowed out a zone where we are likely to see a bearish reaction if price is able to push up one more wave. We’ll be looking for short entries if price makes it there. Our invalidation level will be around the 10.000 range.
Third, see all the blue support boxes? this is where we expect to find minor reactions on our way down to 6000, and eventually 5000.
Now what does this all mean for our scenario? Are we long now, short later? Do we wait? Do we short now?
Price is still ranging, so taking a trade now would be the same as taking the trade last week.. too speculative and prone to liquidation. We’ll have to wait for price to work out this range, between the support and resistance box.
2HR
The 2HR chart doesn’t show us much more. Ichimoku is in equilibrium, and momentum is building up ready to be released. But this will probably not happen until the market took out all the stop losses, only then will it go on its way. Don’t be one of those stop losses, be a passenger on the price train. You just have to wait for it to get to our station :)
Here;s the link to our Longer term market outlook, check it out! And follow us to receive our updates on the developing scenarios.
Weekly
We talked about the weekly chart yesterday in a greater detail, so we’ll keep it brief here. The link to yesterdays post is at the bottom of this update, be sure to check that out.
The only things we’ll say here is:
We’re coming up to the weekly kijun, setting us up for a bearish kijun bounce. As we discussed yesterday, this is not only the area of the weekly kijun but a zone of (multiple timeframe) confluence of many resistances.
We had 2 huge weekly candles in a row, in a bear market. Many will shout at the top of their voices that this is bullish, and it is the end of the bear market. That makes us even more confident it definitely isn’t. We view it as a a sign of tremendous weakness: fomo traders blindly entered the market after a short squeeze, resulting in the second big positive candle. Fomo traders aren’t smart traders, and their hand is usually weak: They will probably panic sell as fast as they fomo bought. And this means that when the price starts dropping, it will drop fast.
We got in the those candles up, and out near the top. We’re now in a strong position, waiting for the market to show us a sign of collapse to get in short. Again we must not jump the gun here: we’re still in a range, and have a possibility of another way up, squeezing all the shorts who weren’t positioned correctly.
Let’s view the daily chart for more detail
Daily
This is where the action is, and there’s a number of things going on.
Firstly, we can see chikou and kijun attempting to break out of the kumo within the next few days. Second, in our big weekly box of resistance, we;ve narrowed out a zone where we are likely to see a bearish reaction if price is able to push up one more wave. We’ll be looking for short entries if price makes it there. Our invalidation level will be around the 10.000 range.
Third, see all the blue support boxes? this is where we expect to find minor reactions on our way down to 6000, and eventually 5000.
Now what does this all mean for our scenario? Are we long now, short later? Do we wait? Do we short now?
Price is still ranging, so taking a trade now would be the same as taking the trade last week.. too speculative and prone to liquidation. We’ll have to wait for price to work out this range, between the support and resistance box.
2HR
The 2HR chart doesn’t show us much more. Ichimoku is in equilibrium, and momentum is building up ready to be released. But this will probably not happen until the market took out all the stop losses, only then will it go on its way. Don’t be one of those stop losses, be a passenger on the price train. You just have to wait for it to get to our station :)
Here;s the link to our Longer term market outlook, check it out! And follow us to receive our updates on the developing scenarios.
Nota
As everyone who entered a position too early is either sitting on a loss or was stopped out, we’re still happily awaiting our safe entry. The move down allowed us to find a nice entry zone for a long, now we just wait for the signals.Let’s look at the charts:
Daily
We’re looking at the same scenario as yesterday, with the addition of a long entry zone. We need to find a bounce, and a signal in this area to enter speculatively. If this happens, we will of course let you know :). It is of course possible that we break down, and don’t get an entry signal, so don’t jump the gun! We’ll be looking for short entries if the market breaks down the 7000 level before reaching up one more time.
If we get one more wave up, we can also enter on the breakout level. In both cases, the target, and projected reversal point is around 8900, perhaps with an extension upwards towards 10000. We’ll be looking for bearish signals around that area to enter an aggressive short position. But again, more on that when we get there. Our focus now lies on the immediate situation.
2HR
On the 2 HR chart we can see the breakdown, but now the kijun is flat, as is the senkou B. This indicates exhaustion, so we’ll have to see if there’s another push down now. Not much more information here. We have to wait for the price to give as a signal to enter, whatever happens: we have our plan laid out!
Follow and like and all that to stay updated on how this trade develops…
Nota
We;re hanging around our entry zone, waiting for cycle signal to enter the long for wave 5. Will update if/when we get a clean signal to enterNota
Good, everyone is in panic mode. Of course we aren't because we haven't had a good signal to enter yet, and ichimoku is telling us not to panic. In big friendly letters.We can see we're still above the daily kijun and kumo, so nothing to worry about (yet). We're seeing that the cycles are near a possible reversal, so we're waiting to see a signal in the coming days. Expecting probably some range-behaviour first..
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