I think I never posted any crypto analysis here, it’s time to give it a start 🙂
Yes, I know what your wondering if you are following my usual articles: is bitcoin market moving the same way than other markets like forex or futures?
Well, my short answer is: every market has something unique in its moves for sure, but we can recognize some similar patterns in all markets where the big players and market makers are present becasue theses markets have something in common: they are designed to take your money.
Bitcoin quick analysis
I think you won’t be surprised if I tell you that big players are owning the bitcoin market too. That’s the reason we can see some usual trapping patterns. Let’s have a look into this:
- We can see a selling trap pattern ending in July. This is an “obvious” down trend line pattern that ends a down move. This pattern is very powerful to anticipate a reversal.
What is less usual in this pattern (compared to some others markets) is the false break up that we can see in the middle. But if you think about it, there could be a simple explanation: everybody in the world knows cryptos are going up and even my cat knows he should buy bitcoin long term 🙂
Knowing this, why not trapping a few buyers that pushed the trigger too early before the real move up?
- I didn’t anotate it to simplify the chart but I hope you will see another down trend line sellers trap pattern ending in September.
- Now in december (the 3rd at the time I’m writing this article) we can see a similar (than 1.) sellers trap pattern: a down trend line (note the retesting wicks precision) with a false break up in the middle to trap buyers.
What could we expect from this?
Well our first quick conclusion could be: it’s a similar pattern, it will break the trend line soon and will go up heavily again.
It could be possible. When you need more clues, it’s often a good idea to unzoom a bit and look at the bigger picture.
What we missed from the previous analysis is that we broker the all time high recently, it means the small buying trap we noticed has more power that we thought initially. We have two probable scenarios:
- Price will induce a bit more sellers and then break the trend line to go straight up
- Price will induce a bit more sellers, then break the line to trap buyers and go for more down side, like it did the last time it broker the all time high. We could get a similar pattern (see the white rectangles)
It’s my guess only, don’t buy or sell using this.
And this has to be confirmed by the coming price action, the most important price action is the present one. What is mean by that is: if we get scenario 1, you will see more selling traps coming because they need liquidity from sellers to move up. And we get scenario 2, you could see some buyers trapping stuff happening after the trend line break, before the move down.