Please read this, this is long but its VERY comprehensive about what is likely to play out in the next day or so. Market is going to likely move big...
Note: Hourly chart, Bitfinex exchange.
Listen, believe what you want to about the price of BTC. The one thing that is for sure is that in the current channel (lower high, lower lows) we will go down to 6400. The EMAs, SMAs, RCI, Kumo twist and downtrend channel all point to the fact that we are going down to 6400. SO - let's pretty much call that an established fact.
Ok, so the question isn't where we will end up here in the next few hours, the question is what will happen where this downtrend channel meets the end of its Elliot Waves in the bigger channel?
ONE MAJOR THING TO CONSIDER BEFORE GOING INTO A LONG POSITION! And I hope that a ton of you think about this before going into a high leverage long position at the end of this channel.
Its absolutely not a secret that LONGS have overtaken the SHORTS. Everyone is saying up up and away, I think there are SOME good signals to consider, but what you have to understand about the basics of these exchanges where you go into a leveraged position is that THEY ARE THE CASINO. Ok?
You better be Warren Buffet to be able to out-leverage these exchanges, and guess what they have to do if more people are right then they are wrong??? That's right! They have to pay them. And let me tell you why these exchanges are considerably more dangerous than casinos: because they make the dice, they don't have full control of it, but they can tilt the table a bit to have those dice roll in their favor.
Now just think about this setup. Everyone and their mother is thinking "BULL BULL BULL BULL - MOONSHOT MOONSHOT MOONSHOT" and they have already revealed their hand.
Not so fast!
First off, understand that these markets ***ARE IN FACT MANIPULATED*** PERIOD. They have already calculated and (even possibly working with each other) to tip the scales towards their profit margins. As much as they would LOVE to pay you for guessing correctly what the market "SHOULD" do, that's not how they make their money. They make their money by liquidating your positions, not by paying people out for getting the market right. And these periods of instability in the prices where it moves outside of the channel is exactly where they make the most profits.
Could we shoot straight up? SURE. Exchanges lose a ton of money because more people are long than they are short. Do you really think that's going to happen? You'd be betting against the casino's leverage ability and their will to use it to make profit though.
Ok, so they can't full out control the prices for too long, because money pours in with Market buys and starts manipulating them. They already calculated this in, they know generally what percentage will come in with market buys that they cant guess, and I guarantee you that it STILL makes them a ton more profit to lose some profit against the market to a certain price than it does to pay out leverage calls that they already know about (ie limit buys).
This is how the exchanges work guys. they essentially GIVE YOU MONEY to put orders in a way so that they can see what people are going to do! (market maker rebates on limit orders)... Those that rush into a position as a market buy have to pay "taker fees". They throw pennies at traders so that we can all, in mass, show them our cards. Those that aren't willing to show their cards, have to pay fees because they can't guess what you're going to do, so they can't fully calculate it.
Most advanced traders know this, but a ton of you out there don't... Now just start adding all that up.
Here is my pure GUESS:
1) We hit 6400ish, we break lower. How much lower? Not sure. They take a TON of longs out by liquidating them (pure profit for them) and activate a ton of stop losses (some profit them) before they are forced by the market to move up because market buys rush in. This is my most likely scenario
2) We hit 6400ish, we break lower, the market gets spooked, because we all still have itchy trigger fingers from the bear market and we slide LOW... And I mean we retest 6100 for sure. 5800? MARKET IS WRECKED... BEAR season for a while again. Second likely scenario.
3) We hit 6400, everything goes up as planned. Everyone makes profits from all their long positions, everyone is uber happy, BULL MARKET in for good. Exchanges lose a ton of money........ Least likely scenario.
Seriously guys, think about this. You're going to have to have a plan in place before stuff starts going wrong, having to make decisions on the fly almost always makes you lose money.
As a matter of fact, I can tell you that a lot of traders that have been doing this for years are sitting this one out till we have a perfectly clear signal of where this market is going. Right now, it still ain't BULL season yet, regardless of what we all want.
Enjoy.
Note: Hourly chart, Bitfinex exchange.
Listen, believe what you want to about the price of BTC. The one thing that is for sure is that in the current channel (lower high, lower lows) we will go down to 6400. The EMAs, SMAs, RCI, Kumo twist and downtrend channel all point to the fact that we are going down to 6400. SO - let's pretty much call that an established fact.
Ok, so the question isn't where we will end up here in the next few hours, the question is what will happen where this downtrend channel meets the end of its Elliot Waves in the bigger channel?
ONE MAJOR THING TO CONSIDER BEFORE GOING INTO A LONG POSITION! And I hope that a ton of you think about this before going into a high leverage long position at the end of this channel.
Its absolutely not a secret that LONGS have overtaken the SHORTS. Everyone is saying up up and away, I think there are SOME good signals to consider, but what you have to understand about the basics of these exchanges where you go into a leveraged position is that THEY ARE THE CASINO. Ok?
You better be Warren Buffet to be able to out-leverage these exchanges, and guess what they have to do if more people are right then they are wrong??? That's right! They have to pay them. And let me tell you why these exchanges are considerably more dangerous than casinos: because they make the dice, they don't have full control of it, but they can tilt the table a bit to have those dice roll in their favor.
Now just think about this setup. Everyone and their mother is thinking "BULL BULL BULL BULL - MOONSHOT MOONSHOT MOONSHOT" and they have already revealed their hand.
Not so fast!
First off, understand that these markets ***ARE IN FACT MANIPULATED*** PERIOD. They have already calculated and (even possibly working with each other) to tip the scales towards their profit margins. As much as they would LOVE to pay you for guessing correctly what the market "SHOULD" do, that's not how they make their money. They make their money by liquidating your positions, not by paying people out for getting the market right. And these periods of instability in the prices where it moves outside of the channel is exactly where they make the most profits.
Could we shoot straight up? SURE. Exchanges lose a ton of money because more people are long than they are short. Do you really think that's going to happen? You'd be betting against the casino's leverage ability and their will to use it to make profit though.
Ok, so they can't full out control the prices for too long, because money pours in with Market buys and starts manipulating them. They already calculated this in, they know generally what percentage will come in with market buys that they cant guess, and I guarantee you that it STILL makes them a ton more profit to lose some profit against the market to a certain price than it does to pay out leverage calls that they already know about (ie limit buys).
This is how the exchanges work guys. they essentially GIVE YOU MONEY to put orders in a way so that they can see what people are going to do! (market maker rebates on limit orders)... Those that rush into a position as a market buy have to pay "taker fees". They throw pennies at traders so that we can all, in mass, show them our cards. Those that aren't willing to show their cards, have to pay fees because they can't guess what you're going to do, so they can't fully calculate it.
Most advanced traders know this, but a ton of you out there don't... Now just start adding all that up.
Here is my pure GUESS:
1) We hit 6400ish, we break lower. How much lower? Not sure. They take a TON of longs out by liquidating them (pure profit for them) and activate a ton of stop losses (some profit them) before they are forced by the market to move up because market buys rush in. This is my most likely scenario
2) We hit 6400ish, we break lower, the market gets spooked, because we all still have itchy trigger fingers from the bear market and we slide LOW... And I mean we retest 6100 for sure. 5800? MARKET IS WRECKED... BEAR season for a while again. Second likely scenario.
3) We hit 6400, everything goes up as planned. Everyone makes profits from all their long positions, everyone is uber happy, BULL MARKET in for good. Exchanges lose a ton of money........ Least likely scenario.
Seriously guys, think about this. You're going to have to have a plan in place before stuff starts going wrong, having to make decisions on the fly almost always makes you lose money.
As a matter of fact, I can tell you that a lot of traders that have been doing this for years are sitting this one out till we have a perfectly clear signal of where this market is going. Right now, it still ain't BULL season yet, regardless of what we all want.
Enjoy.
Note
Quick update. Just wanted to clear the EW charts a bit. Prices going along as expected.There is potential we see the huge move by midnight tonight all the way to early morning hours. I expected it to go down within the next 12 hours for sure.
Updated (but still janky) EW counts on local downtrend channel.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.