Yesterday and over the last few days I have mentioned a few things that had me worried. Let's go through them as they really matter (most charts, tweets and past ideas will be at the bottom):
The CoT report from CME showed that on July 30th (released on Friday 2nd), institutions had been positioning themselves long (sub 10k) while retail traders positioning short. The one on August 6th (released on Friday 9th) showed that institutions were shorting and retail longing heavily. Since we broke above 10.3k I was quite bullish, but when I started seeing too many bulls and longs, I got worried. I could see it in me that I was getting complacent. Studying the sentiment of traders on twitter and tradingview really is a valuable tool. However it is best combined with actual quantitative data that confirm that.
The main data that confirmed my assumptions, came from the Long/Short ratios on Bitfinex and Gate. There were simply too many longs compared to shorts, with longs on Bitfinex being at a 5 month high. Every time they reached that level there price fell significantly. On the other hand shorts were at extremely low levels and the Long/Short ratio on Gate was around 60-65:40-35. A few days ago it was at 48:52.
Another two important sources of data are premiums on BTCUSD & BTCUSDT on Bitfinex & Binance, as well as lending rates of fiat currencies. In my opinion these premiums are telling us two things when there is nothing wrong with Bitfinex or Tether: a) People are seriously dumping Tethers for Bitcoin (there is an 'excess' of stablecoins in the 'system') and b) Bitfinex and several other exchanges provide USD and USDT leveraged trading, so many of their traders were heavily long. These are probably two reasons as to why the premiums persisted.
Most lending rates for fiat currencies and stablecoins were slowly increasing and were above 10% APR, while some others like JPY on Liquid and Tether on Bitfinex were getting out of hand (above 40% APR). These were also signs that people were borrowing too much and paying too much to have their positions open. (Coinlend . org is a great site to check rates.)
Now on the side of derivatives, funding rates on perpetuals have been quite high for the last few days. Mostly above 0.04% and a few times they got near 0.13%. This morning on Bitmex funding was at 0.05% and the predicted rate was 0.09%. As for the quarterlies there were some pretty fat premiums that didn't make much sense at this stage. The closer we get to the expiration the lower these premiums should be at similar past prices. Such premiums would have made sense a 1-2 months ago, but not now. Yet another indication that there were too many bulls.
Something that really told me don't touch any long positions this morning, was a tweet by OKex which said that most of their users are long alts on futures (against USD) with L/S > 2. Overall both on Gate and Bitfinex people are heavily long alts and this was yet another confirmation that things aren't good. Most L/S ratios in BTC+USD together have been extremely high for some time and they are dropping slowly. That's not good for BTC and that's why I wrote an analysis about altcoins crumbling two days ago. During the run up from 3k to 14k and increasing L/S ratio for alts was benefiting Bitcoin as altcoin investors were dumping their coins for BTC, while speculative traders provided them with liquidity. Now that these traders are overleveraged and their deleveraging is causing some pain to Bitcoin too.
Over the last few weeks alts have been bleeding heavily both in BTC and USD without Bitcoin making any significant moves. Their collapse can't leave Bitcoin totally unaffected forever as this ecosystem is heavily interconnected. Apart from the reason I mentioned above, some other reasons might be that several people use BTC as collateral for their altcoin trades or simply sell some of their BTC to cover their USD losses (as most traders and investors hold some BTC). Other potential reasons might be that with lower altcoin prices, less bitcoins are being 'used' for altcoin trading. Also arbitrageurs pushing the price lower indirectly.
As a final note on the quantitative and fundamental side, analyzing orderbooks is also quite useful. It was clear that there were many asks above 12k and the orderbooks were filled with sell orders which were way more than the bids. This was telling me that it wouldn't be easy for us to overcome 12k.
Now let's get into the technicals
a. There was a TD 9 on the on the daily. Not only did we get a 9, but we got it on a hanging man (reversal candle).
b. The uptrend was too obvious. We had a trend line that lasted for too long and was touched too many times.
c. 11k were left untested and 11.2k was a very nice spot for an SFP. Most people that wanted to long 8500, then waited for 11k, but most longed 11.8-12k.
d. 12k+ is an area that the market really hates. Based on the Volume Profile we can clearly see that. We can also see that the re accumulation at 10500-12000 is probably no complete yet. Even though we have spent enough time, there is still no significant High Volume Node in this area.
e. We got up too fast. Left the weekly Pivot untested and went straight up to R3 weekly and R1 Monthly fast.
f. We have lots of gaps open on CME with the most important one being at 8500. The rest aren't really that important (note that gaps don't have to get filled).
g. 10200-10300 is also left untested as are some areas below 9k. It would be perfect if we had mega SFP below 9.1k. Personally I don't like double bottoms and I can't remember if I've ever seen Bitcoin bottom on a double bottom like this before. Usually bottoms are quick and don't give you much time to buy it. This is a very clean double bottom below which there could be a lot of liquidity.
Note that I am take almost only long positions. I am a Bitcoiner and was born as a trader during the early stages of the 2015-2017 bull market. For me shorting Bitcoin is the hardest thing to do. Just flipping neutral and not being in a long position is nearly as good as being in a short for me. Most money is made on the long side, never forget that. I simply can't bet against the most bullish asset on the planet. So let's see how we could position ourselves in the current situation:
Like I was saying over the last few days: wait for 12050-12150 to break. This still holds true. I don't believe that if we go up there again we will dump. This morning I also mentioned how I stayed on the sidelines waiting for that pop, but that I also expected a fake out first. Imho opening a position here seems a bit risky. The SFP at 11.2k and retest of 11.1k might not be complete yet as it hasn't been properly done on most exchanges other than Bitmex. Buying a potential dip at 11k with a stop at 10.7k could be a good idea but I wouldn't put too much on it. For now the long term structure is still bullish as we are simply retesting the breakout level of the Adam & Eve bottom and its target is still at 13.2k.
In my opinion you can start a position there and then add more if we break 12k. However it has to be noted that when the market decides a direction during the weekend it tends to continue in that direction. Most recent large CME gaps were initially continuation gaps, not exhaustion gaps. Whales want to f*ck the weakest side which right now is clearly retail traders. A large gap would seriously damage them and help whales push the price lower. Right now it is not that hard with so many retail traders being long everywhere. In case we lose 10.7k, I'll wait for 8.5k or break of 12k to get long again.
My 19k target by end of September still remains. I played this one safe and I believe we have plenty of time. Remember that Bitcoin went from 7.5k to 13.9k in 16 days. From 4.2k to 13.9k in 85 days. Below I will put an old idea that is still relevant for its targets, you can learn some stuff from it and will also put some more charts.
The CoT report from CME showed that on July 30th (released on Friday 2nd), institutions had been positioning themselves long (sub 10k) while retail traders positioning short. The one on August 6th (released on Friday 9th) showed that institutions were shorting and retail longing heavily. Since we broke above 10.3k I was quite bullish, but when I started seeing too many bulls and longs, I got worried. I could see it in me that I was getting complacent. Studying the sentiment of traders on twitter and tradingview really is a valuable tool. However it is best combined with actual quantitative data that confirm that.
The main data that confirmed my assumptions, came from the Long/Short ratios on Bitfinex and Gate. There were simply too many longs compared to shorts, with longs on Bitfinex being at a 5 month high. Every time they reached that level there price fell significantly. On the other hand shorts were at extremely low levels and the Long/Short ratio on Gate was around 60-65:40-35. A few days ago it was at 48:52.
Another two important sources of data are premiums on BTCUSD & BTCUSDT on Bitfinex & Binance, as well as lending rates of fiat currencies. In my opinion these premiums are telling us two things when there is nothing wrong with Bitfinex or Tether: a) People are seriously dumping Tethers for Bitcoin (there is an 'excess' of stablecoins in the 'system') and b) Bitfinex and several other exchanges provide USD and USDT leveraged trading, so many of their traders were heavily long. These are probably two reasons as to why the premiums persisted.
Most lending rates for fiat currencies and stablecoins were slowly increasing and were above 10% APR, while some others like JPY on Liquid and Tether on Bitfinex were getting out of hand (above 40% APR). These were also signs that people were borrowing too much and paying too much to have their positions open. (Coinlend . org is a great site to check rates.)
Now on the side of derivatives, funding rates on perpetuals have been quite high for the last few days. Mostly above 0.04% and a few times they got near 0.13%. This morning on Bitmex funding was at 0.05% and the predicted rate was 0.09%. As for the quarterlies there were some pretty fat premiums that didn't make much sense at this stage. The closer we get to the expiration the lower these premiums should be at similar past prices. Such premiums would have made sense a 1-2 months ago, but not now. Yet another indication that there were too many bulls.
Something that really told me don't touch any long positions this morning, was a tweet by OKex which said that most of their users are long alts on futures (against USD) with L/S > 2. Overall both on Gate and Bitfinex people are heavily long alts and this was yet another confirmation that things aren't good. Most L/S ratios in BTC+USD together have been extremely high for some time and they are dropping slowly. That's not good for BTC and that's why I wrote an analysis about altcoins crumbling two days ago. During the run up from 3k to 14k and increasing L/S ratio for alts was benefiting Bitcoin as altcoin investors were dumping their coins for BTC, while speculative traders provided them with liquidity. Now that these traders are overleveraged and their deleveraging is causing some pain to Bitcoin too.
Over the last few weeks alts have been bleeding heavily both in BTC and USD without Bitcoin making any significant moves. Their collapse can't leave Bitcoin totally unaffected forever as this ecosystem is heavily interconnected. Apart from the reason I mentioned above, some other reasons might be that several people use BTC as collateral for their altcoin trades or simply sell some of their BTC to cover their USD losses (as most traders and investors hold some BTC). Other potential reasons might be that with lower altcoin prices, less bitcoins are being 'used' for altcoin trading. Also arbitrageurs pushing the price lower indirectly.
As a final note on the quantitative and fundamental side, analyzing orderbooks is also quite useful. It was clear that there were many asks above 12k and the orderbooks were filled with sell orders which were way more than the bids. This was telling me that it wouldn't be easy for us to overcome 12k.
Now let's get into the technicals
a. There was a TD 9 on the on the daily. Not only did we get a 9, but we got it on a hanging man (reversal candle).
b. The uptrend was too obvious. We had a trend line that lasted for too long and was touched too many times.
c. 11k were left untested and 11.2k was a very nice spot for an SFP. Most people that wanted to long 8500, then waited for 11k, but most longed 11.8-12k.
d. 12k+ is an area that the market really hates. Based on the Volume Profile we can clearly see that. We can also see that the re accumulation at 10500-12000 is probably no complete yet. Even though we have spent enough time, there is still no significant High Volume Node in this area.
e. We got up too fast. Left the weekly Pivot untested and went straight up to R3 weekly and R1 Monthly fast.
f. We have lots of gaps open on CME with the most important one being at 8500. The rest aren't really that important (note that gaps don't have to get filled).
g. 10200-10300 is also left untested as are some areas below 9k. It would be perfect if we had mega SFP below 9.1k. Personally I don't like double bottoms and I can't remember if I've ever seen Bitcoin bottom on a double bottom like this before. Usually bottoms are quick and don't give you much time to buy it. This is a very clean double bottom below which there could be a lot of liquidity.
Note that I am take almost only long positions. I am a Bitcoiner and was born as a trader during the early stages of the 2015-2017 bull market. For me shorting Bitcoin is the hardest thing to do. Just flipping neutral and not being in a long position is nearly as good as being in a short for me. Most money is made on the long side, never forget that. I simply can't bet against the most bullish asset on the planet. So let's see how we could position ourselves in the current situation:
Like I was saying over the last few days: wait for 12050-12150 to break. This still holds true. I don't believe that if we go up there again we will dump. This morning I also mentioned how I stayed on the sidelines waiting for that pop, but that I also expected a fake out first. Imho opening a position here seems a bit risky. The SFP at 11.2k and retest of 11.1k might not be complete yet as it hasn't been properly done on most exchanges other than Bitmex. Buying a potential dip at 11k with a stop at 10.7k could be a good idea but I wouldn't put too much on it. For now the long term structure is still bullish as we are simply retesting the breakout level of the Adam & Eve bottom and its target is still at 13.2k.
In my opinion you can start a position there and then add more if we break 12k. However it has to be noted that when the market decides a direction during the weekend it tends to continue in that direction. Most recent large CME gaps were initially continuation gaps, not exhaustion gaps. Whales want to f*ck the weakest side which right now is clearly retail traders. A large gap would seriously damage them and help whales push the price lower. Right now it is not that hard with so many retail traders being long everywhere. In case we lose 10.7k, I'll wait for 8.5k or break of 12k to get long again.
My 19k target by end of September still remains. I played this one safe and I believe we have plenty of time. Remember that Bitcoin went from 7.5k to 13.9k in 16 days. From 4.2k to 13.9k in 85 days. Below I will put an old idea that is still relevant for its targets, you can learn some stuff from it and will also put some more charts.
Kommentar:
These are my tweets. You can have a look at my profile overall, on the 'analysis' thread I keep posting various updates and all new ideas
twitter.com/btchomer.../1158838183418896385
twitter.com/btchomer.../1160111038165073920
twitter.com/btchomer.../1159615387417415681
twitter.com/btchomer.../1159915223140225024
twitter.com/btchomer.../1158838183418896385
twitter.com/btchomer.../1160111038165073920
twitter.com/btchomer.../1159615387417415681
twitter.com/btchomer.../1159915223140225024
Kommentar:
Kommentar:
Bitcoin funding back to 0.01%. But the chart doesn't look bullish. Very little has changed since yesterday other than the funding dropping and premiums going down a bit.
Alts popping make me slightly bullish on Bitcoin as they could provide upside fuel, but it might not be time yet. So far they have popped 10-20% mostly because BTC dropped and they had fallen 25-50% in BTC terms in just 2 weeks. To me this looks like a dead cat fueled by Bitcoin's bearishness.
Yesterday I mentioned closing alt shorts as many were at support and had already dropped too much. Something really important to note is that many are on a TD 9 or 8 on 1W. So could this be their reversal? Maybe as many are having strong bullish engulfing candles on the daily, while an 8/9 on the weekly TD is not something to mess with.
Bitcoin's dominance at 69-70% which were my lowest targets. By the looks of it we are heading to 78-85% and this is just another typical pullback. Normal and healthy as Bitcoin corrects. In my opinion ETH, XRP, TRX, EOS, NEO and others are clearly still in a bubble.
Most have maximum another 20% of upside in BTC terms. If BTC drops hard they could feel a lot of pain like they did in July. If they keep going up as BTC goes down, then they will fuel Bitcoin later and their upside is limited. Then on its way up it will crash them again and force the final capitulation.
Alts popping make me slightly bullish on Bitcoin as they could provide upside fuel, but it might not be time yet. So far they have popped 10-20% mostly because BTC dropped and they had fallen 25-50% in BTC terms in just 2 weeks. To me this looks like a dead cat fueled by Bitcoin's bearishness.
Yesterday I mentioned closing alt shorts as many were at support and had already dropped too much. Something really important to note is that many are on a TD 9 or 8 on 1W. So could this be their reversal? Maybe as many are having strong bullish engulfing candles on the daily, while an 8/9 on the weekly TD is not something to mess with.
Bitcoin's dominance at 69-70% which were my lowest targets. By the looks of it we are heading to 78-85% and this is just another typical pullback. Normal and healthy as Bitcoin corrects. In my opinion ETH, XRP, TRX, EOS, NEO and others are clearly still in a bubble.
Most have maximum another 20% of upside in BTC terms. If BTC drops hard they could feel a lot of pain like they did in July. If they keep going up as BTC goes down, then they will fuel Bitcoin later and their upside is limited. Then on its way up it will crash them again and force the final capitulation.
Kommentar:
The situation looks very similar to the bottom at 9.1k. Big fast drop, beautiful SFP, reclaim of the broken support and chop. This time we retested 11.1k that was left untested and had a beautiful SFP at 11.2k which we then reclaimed and now going sideways.
For now we are trapped below 11.5k which I'd like to see reclaimed before acting, so these are the two scenarios I see based on current untested areas.
The situation looks very similar to the bottom at 9.1k. Big fast drop, beautiful SFP, reclaim of the broken support and chop. This time we retested 11.1k that was left untested and had a beautiful SFP at 11.2k which we then reclaimed and now going sideways.
For now we are trapped below 11.5k which I'd like to see reclaimed before acting, so these are the two scenarios I see based on current untested areas.
Kommentar:
11.1k held nicely and the bottom now looks almost the same as the 9.1k bottom. Really bullish
Kommentar:
Wait for the mini retrace and long the corn
Wait for the mini retrace and long the corn
Kommentar:
The mini retrace to 11280 came, but I went long at 11350. Right now I decided to put my stop right below 11200 even though there is a risk of me being stopped out easily. The reason is that I am not as certain as I was below 11k,
Overall still too many longs, even though some quantitative data point to the fact that there aren't as many longs right now.
Right now we have a gap in a gap on CME, which makes me think it should get filled. We have a double gap open at 8500, but until 10700 breaks I am not calling for those levels. Imho the whole rally and situation looks like fractals of the 7.5k bottom and 9.1k bottom. Only this time it is taking longer as the moves are larger.
For now we are in the process of reclaiming 11450-11500 and it is going well. Once we close above the Weekly Pivot I will be even more bullish. Now I am a bit more cautious.
Overall still too many longs, even though some quantitative data point to the fact that there aren't as many longs right now.
Right now we have a gap in a gap on CME, which makes me think it should get filled. We have a double gap open at 8500, but until 10700 breaks I am not calling for those levels. Imho the whole rally and situation looks like fractals of the 7.5k bottom and 9.1k bottom. Only this time it is taking longer as the moves are larger.
For now we are in the process of reclaiming 11450-11500 and it is going well. Once we close above the Weekly Pivot I will be even more bullish. Now I am a bit more cautious.
2. The CME chart with the dashed lines, is showing the important and unimportant gaps. Dashed = unimportant, solid = important
3. The low timeframe CME chart shows how bullish it looked and how the trend is now broken. We also had two recent gaps at 11.7-11.8k and 10.5-10.8k
4. The previous Idea is right at the bottom you have to click on it
5. After the drop from 11850 to 11150 the Open Interest on Bitmex dropped from 89k to 85k and is now back above 86k (not many shaken out)
5. I thought we could have had successfully reclmai 11.6-11.8k which was an old high from 2018, but now we've lost it again and we've lost the current PoC. Now we are sitting on the next most important Volume Node (HVN)