Bitcoin (BTC): Killer Whales, We Seeeee You

February 12, 2019 / by Bill Noble

Over the last month, rallies have been met with selling. Anybody who entertained FOMO wound up getting hurt. This created a level of depression and despair in late January equal to what was seen at the bottom in December.

Yesterday, we covered the big picture. Our conclusion was that the current environment was set for a 30 percent move in Bitcoin (BTC). The huge move could be up or down. If Bitcoin (BTC) can rally through $3,660 in the next 10 days, the huge move could be to the upside. If Bitcoin (BTC) can not rally through $3,660 in the next 10-days, risk of a serious down move increases.

To search for clues that Bitcoin (BTC) will rally in this way, we took an approach that is counterintuitive. We went searching for trapped whales who may be thinking the recent 10 percent move is an ideal time to get out of oversized long positions.

Looking at Bitcoin intraday charts, we see high volume selling occurring near $3,600 at Bitfinex (Figure 1) and BitMEX (Figure 2). Given our search for bears, the high volume zones may indicate the bears are actively trying to press price lower.

 class= Figure 1

 class= Figure 2

At present, Bitcoin (BTC) is consolidating in a triangular formation. Theoretically, that favors the bulls. That said, using traditional chart patterns like triangles can be the road to ruin. The standard technical analysis textbook has not been helpful over the past 12 months in crypto. So, believe it or not, the fact that there is an obviously bullish formation may not be bullish.

Now, for the other side of the coin.

Profitable trades can frequently be made by figuring out what would hurt the most people, and then develop a scenario around that as a potential road map.

After looking at the intraday charts, we can see the following happening:

1) Bitcoin (BTC) moves to $4,250 as the Gann work proves to be positive. Big sellers are surprised and their orders get filled.

2) Euphoria ensues as the bear market is declared over.

3) Retail chases. FOMO reaches a zenith.  

4) Other big sellers emerge. The Dollar stays strong in the FX markets. Bitcoin (BTC) then moves from $4,250 to $3,800.

Bottom Line: Big sellers are out there. They are either going to appear now or when/if Bitcoin Bitcoin (BTC) gets to $4,250. When we need to come up with a plan, we turn to the Crypto.IQ Trading Desk. They produce invaluable insight that makes our work more interesting and accurate.

Join me there and profit from the next move.