We have our answer from Bitcoin!

#bitcoin #technicalanalysis #ta #short #sell

Yesterday’s post included a drawing of our megaphone pattern. We questioned how much longer we’d remain inside of this pattern before dropping. Today, we have our answer. But why, you might ask. We are so close to halving. Shouldn’t the price be going up?

Well, that’s exactly what everyone thinks. Resultantly, Bitcoin bros are 10-100x their leverage. This makes a liquidation event highly probable, and as you have heard from me many times in the past, likely. I believe this is exactly what is currently taking place and probably will continue to occur until sometime post-halving. It has happened every time in the past and there should be no reason why we should expect it to stop this time around. Sure, maybe it won’t be as severe but the market will often travel in the price direction that can hurt the greatest amount of investors. This time should be not much different.

I was stopped out of my longs. I should’ve taken some profits while in the green but didn’t have the motivation to take action while I was sucking up precious sun in a lounge chair next to the pool last week. Thankfully, tight stops saved the day. Now, the question becomes where to find support and re-entry. Personally, I believe that we’ll at least retest that multi-year support, but maybe not before a quick spike up to liquidate all the shorts.

A quick peek at our liquidation heatmap will show us that there are now a large amount of shorts around 67-68k. I could see us spiking up, liquidating these shorts, before further drop:

After this, I think we may retest our multi-year support (again) which now sits at around 62k. Then, the question becomes whether or not it holds. Since this is the third time we will have retested it after crossing above, I am honestly not as confident it will hold support. Remember, at each retest, the support gets weaker. That said, I may still enter a small long here with tight stops. Below this you can see support at around 54-55k (purple line). And below that? That 48k neckline which I have been discussing for months now. I would absolutely love to scoop up some BTC at that price!

Best,
Stew