Bitcoin - Sunny With a Slight Chance of a Short Squeeze
Even the news of the SEC' denying nine ETF's, shorts that continue to increase their positions, and all the calls for 4500 Bitcoin' continues to hold it's ground. So after the short squeeze we saw on Tuesday you would think speculators to the downside would be throwing in the towel. NOPE, they continue to pile into an already crowded trade. It has subsided a little overnight, but short interest remains near ATH's. Yet Bitcoin' continues to slowly grind to the upside.
We have been telling our followers on S.C. for a couple weeks now that there is some underlying strength that many "Analysts" have simply missed. You will not see this on your MACD, or 150/50/14 day moving averages. Yet the evidence was there as it pertained to price action. This is why we issued a swing trade at 6195 6 days prior to the target reached and position closed at 6825 Tuesday. In addition we issued a position trade with a range which is still in play. As bad as the chart may have looked, there was evidence everywhere that this market was stronger than most thought and we simply called the markets bluff.
The current price of any instrument is a balance of bulls and bears taking into account all news, events and other items that affect pricing at any point in time. When the bulls and bears are not in balance the price moves until balance is once again found. This is how all markets move and to not understand this will result in poor returns over time. The goal of any analyst is to look for evidence of underlying strength or weakness that is NOT found in some obscure indicator. In simple terms, when the herd is bearish and is shorting the market, and it continues to hold support, THERE's YOUR SIGN!
As a retail investor we do not have access to insider information, or friends in the government tipping us off to upcoming events. All we have is price action, but this is all we need. Failure of bears to push Bitcoin to new lows (and I mean for longer than a momentary spike) was the first piece of evidence. There is also the flow of money that many do not understand in range bound markets which we have been focused on over the past couple weeks on S.C. in our articles. This does not imply that we can not move lower. We are not oracles by any means.
What we were implying is there was hidden underlying strength in the market, based on the flow of money and price action. While many were following moving average indicators and the drama in the market, we were taking the contrarian trade based on the evidence not fluff.
There is a misconception that only shorts make money in a bear market, however simple math shows in range bound markets there are as many bullish moves as bearish. This is what we are in and though we see a continuation of the correction, lower lows are starting to become urban legend. And what I imply by a lower low, is a sustained low, not a temporary price spike to the downside. Seriously since the initial dip, there is a rally after every selloff. So when I hear bears only make money in bear markets, they obviously do not realize that there was a bullish move prior to the bearish one. Actually since the initial dip, there have been more bullish moves than bearish. We are at 6528 right now hello!
6000 has been a solid base for longs to build off of. This is an area where money has flowed back into Bitcoin'. In range bound markets, money is either on the sidelines or in the market as only so much money is allocated to the space. Leveraged shorts add money to the sidelines, which increases the coiling affect on the spring. So take a look at the market and ask yourself, is money in Bitcoin' down here looking to come out of the market, or is money on the sidelines waiting to come in? Those that sold during the previous rally put money on the sidelines. There are HODLr's that simply do not sell. What about the people that bought at 18k and went through 4 dips to 6k? I imagine they are now saying "I give up", probably not.
This is how consolidations happen in every market, and the longer we stay above 6000 the more investors turn from a bearish to bullish sentiment and start adding. I have had several friends ask me recently "you think I should buy some here?" which is opposite from a month or so ago where they had a friend of a friend who had a cousin that told them Bitcoin was going to 2500. Lets add to the sidelined money the shorts piling into the market just off the low. This is borrowed money on the sidelines which must come back into bitcoin.
If money was flowing out of Bitcoin' than the price would be moving down. We do not see this, it continues to show strength, which implies, money is not just starting to flow into the market, but new money may be accumulating at these levels as well.
Quite simply, it is sunny with a slight errrrr good chance of a short squeeze! Coil it up shorts!
Again this does not imply we do not move lower, I have posted my midterm outlook for which I believe we will pullback one more time before a rally. I have had this posted for weeks now, so I am not flipping flopping or changing my outlook. But to imply this market is falling apart here is to ignore the evidence of price action and money flow. Not that we can't, as the money could stop flowing in, but with this massive of a short interest, the probabilities are slightly tilted to the long side here. Target mid to low 7k's.
We have been telling our followers on S.C. for a couple weeks now that there is some underlying strength that many "Analysts" have simply missed. You will not see this on your MACD, or 150/50/14 day moving averages. Yet the evidence was there as it pertained to price action. This is why we issued a swing trade at 6195 6 days prior to the target reached and position closed at 6825 Tuesday. In addition we issued a position trade with a range which is still in play. As bad as the chart may have looked, there was evidence everywhere that this market was stronger than most thought and we simply called the markets bluff.
The current price of any instrument is a balance of bulls and bears taking into account all news, events and other items that affect pricing at any point in time. When the bulls and bears are not in balance the price moves until balance is once again found. This is how all markets move and to not understand this will result in poor returns over time. The goal of any analyst is to look for evidence of underlying strength or weakness that is NOT found in some obscure indicator. In simple terms, when the herd is bearish and is shorting the market, and it continues to hold support, THERE's YOUR SIGN!
As a retail investor we do not have access to insider information, or friends in the government tipping us off to upcoming events. All we have is price action, but this is all we need. Failure of bears to push Bitcoin to new lows (and I mean for longer than a momentary spike) was the first piece of evidence. There is also the flow of money that many do not understand in range bound markets which we have been focused on over the past couple weeks on S.C. in our articles. This does not imply that we can not move lower. We are not oracles by any means.
What we were implying is there was hidden underlying strength in the market, based on the flow of money and price action. While many were following moving average indicators and the drama in the market, we were taking the contrarian trade based on the evidence not fluff.
There is a misconception that only shorts make money in a bear market, however simple math shows in range bound markets there are as many bullish moves as bearish. This is what we are in and though we see a continuation of the correction, lower lows are starting to become urban legend. And what I imply by a lower low, is a sustained low, not a temporary price spike to the downside. Seriously since the initial dip, there is a rally after every selloff. So when I hear bears only make money in bear markets, they obviously do not realize that there was a bullish move prior to the bearish one. Actually since the initial dip, there have been more bullish moves than bearish. We are at 6528 right now hello!
6000 has been a solid base for longs to build off of. This is an area where money has flowed back into Bitcoin'. In range bound markets, money is either on the sidelines or in the market as only so much money is allocated to the space. Leveraged shorts add money to the sidelines, which increases the coiling affect on the spring. So take a look at the market and ask yourself, is money in Bitcoin' down here looking to come out of the market, or is money on the sidelines waiting to come in? Those that sold during the previous rally put money on the sidelines. There are HODLr's that simply do not sell. What about the people that bought at 18k and went through 4 dips to 6k? I imagine they are now saying "I give up", probably not.
This is how consolidations happen in every market, and the longer we stay above 6000 the more investors turn from a bearish to bullish sentiment and start adding. I have had several friends ask me recently "you think I should buy some here?" which is opposite from a month or so ago where they had a friend of a friend who had a cousin that told them Bitcoin was going to 2500. Lets add to the sidelined money the shorts piling into the market just off the low. This is borrowed money on the sidelines which must come back into bitcoin.
If money was flowing out of Bitcoin' than the price would be moving down. We do not see this, it continues to show strength, which implies, money is not just starting to flow into the market, but new money may be accumulating at these levels as well.
Quite simply, it is sunny with a slight errrrr good chance of a short squeeze! Coil it up shorts!
Again this does not imply we do not move lower, I have posted my midterm outlook for which I believe we will pullback one more time before a rally. I have had this posted for weeks now, so I am not flipping flopping or changing my outlook. But to imply this market is falling apart here is to ignore the evidence of price action and money flow. Not that we can't, as the money could stop flowing in, but with this massive of a short interest, the probabilities are slightly tilted to the long side here. Target mid to low 7k's.
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