Quick evening update. Ya'll know I don't do this unless something unusual has occurred or is occurring. In my last video update on Monday, I mentioned that we needed to be a bit cautious this week because BTC loves to throw us a wicked curve ball every now and then. And that is exactly what seems to be occurring here.
Recapping that video with a BLUF, I would state quickly that I was hoping for more of a retest of our support (which we did get). However, I was hoping that support would hold and that we'd move sideways through Friday. My cautionary flag, if you remember, was that everything seemed to be playing out precisely as expected for the last several weeks and when that happens, experience has taught me, be prepared for something new and different. And here we have it. A strong dip below support as the shorts go on the prowl for all those leveraged longs.
Now, remember, I stated that we needed some good test of that support for me to really become more bullish. This dip below support is even better that I could have asked for. And I am super excited to see what is occurring here as it causes me to become even more bullish than even I expected to become (and I am a strong bull above that BLACK ascending trend line as you all know).
So, here are a couple of things to note on my noisy chart:
#1 - Doing Fibonacci from the wick low on March 14th to the wick high on March 22nd gives us some good levels.
#2 - .618 Fib retracement intersect exactly with the 100 day ma which is also intersecting with the 50 day ma. This is huge! And this area of confluence provides us with such a strong support that it as if it almost repels the price above it from coming down to touch it. It will be difficult for the bears to get that contact but if they do, it will act as a trampoline of sorts to propel us upwards rapidly.
#3 - .618 is a common retracement level and is often reached in a drawback. However, %50 retracement is also common and we have currently reached that level which is intersecting with an already drawn support level I had at around $43,000. Will this hold?
Here are my expectations:
#1 - We are back in the FUD zone. I don't know what happened news wise as I have been on a bit of a vacation around here, but I did see that the VIX spiked quite drastically:
This spike in fear has obviously carried over, whatever the cause is? But my charts are showing me that this fear my be quick lived.
#2 - The dollar has done the expected and become even more bullish (as I already outline in the last video). When the VIX is up and the dollar is up, it's almost a 100% guarantee everything else will drop. And that is what has happened.
Really, I don't expect us to spend too much time back in this "FUD ZONE" area. When I say "too much time" I mean that it won't be months again like it was last time. The bulls have signaled that they want to move higher with our break above $45,000 resistance last week. Liquidity is drying up (another reason for the quick drop) - a very bullish sign. And long-term hodl'er wallets are at an all-time high as $$$ moves off of exchanges to hard wallets.
If I had to guess, I'd say were probably already almost done with this current drawback. The marked smoked out most of those leveraged longs and now we can proceed once again according to game plan. Maybe another day or two (a week at the most) is my best guess and we'll be on our way up and back over that support zone again!
Take care my fellow traders,