No Capitulation, Yet! "Testing The Waters"

9 Agu

Capitulation is not here, yet! The whales were just "testing the waters."

Ladies and gentlemen... It is my pleasure to write for you again today.
I am hoping you can enjoy a wonderful weekend.

The capitulation event is not yet in, it is not done; it isn't over.
Bitcoin's correction hasn't reach its end; based on the chart.

➖ Support and resistance.
➖ Supply and demand.
➖ Buying and selling.

These are the basics.

When Bitcoin stood at $70,000 on the 29th of July, the demand for Bitcoin was strong below this level. This means that there were plenty of buy-orders accumulated which work as support.

Let's study the price action and market dynamics using a few examples in order to try and visualize the current market situation.

Let's say that it takes about 10billion dollars for Bitcoin to move from $70,000 to $49,000, that is, sellers need to fill this many buy orders in order to reach that low.

In contrast, since it would only take a tenth of that amount of money, say 1billion, for Bitcoin to move back to ~$60,000. And thus the price can be easily inflated at a "low cost." This is just an example, the real numbers can be much different but it reveals the illusion of prices, sort of like a magic trick.

Now, we have a few revealing signals popping up from this latest bearish move.

The 5th of August, Bitcoin wicked to the $49,000 price level but ended up closing at $54,000 by the end of the session.

$50,000 is a "psychological level" but this level failed to sustain Bitcoin on a wick. Moving back above this level for daily visualization does the "magic trick."

For those now looking at $53,000 and $50,000 as their next support, think of this candle wick as this $50,000 level has already been breached.

For a new drop, unless there is a higher high compared to the 29th of July, we should consider anything and everything below $50,000 but not above it, for the reason mentioned above.

When you see a long lower wick, supported by high volume after months of consolidation on a bearish impulse, it means that support is being removed, has been removed. The only reason to remove support is because the market is expecting a much bigger, broader and wider drop.

Support has been removed and a bounce is now taking place.

Bitcoin bounced from $49,000 to $62,700... How much higher can it go?
$65,000, $68,000? Still, a clear lower high and definitely no volume involved.

Volume is the main signal to gauge market strength.
Notice the high volume on the drop, but the rise has very little volume; the lowest in more than 200 days.

This indicates that the bounce is weak; not a real move.
While the drop is strong; the main market direction presently and reveal that the bears are still not done.

What I am trying to say is this: Prepare for the drop, August and September are key months.

Thanks a lot for your continued support.

Namaste.

10 Agu

Catatan

Capitulation example: 50% after 280 days of consolidation.


It took three months for the recovery to start from bottom prices.