Month: February 2022

So the scenario from the previous post is playing out. 1.) BTC price “balances out” in market profile theory that simply means Bitcoin trades sideways at this level for a time, building value. Obviously, with the news, assets are under pressure. Interestingly the VIX volatility index is not violently ramping up. So far the selling has been orderly.

So. the last short term trendline failed. This is why I recommended putting in a stop if the trendline was broken in the previous post. As you can plainly see the January low has yet to be breached.

Possible trade entry for me.

1.) A speculative entry long trade just below 32933.33 and try to catch a potential double bottom.

2.) Enter long above the 9 day down trendline, if and when BTC price moves higher in the chart above.

One last thing. BTC seems to be highly correlated to the equity markets. To put into context how a non correlated asset class looks check out the price of GLD (gold). Gold has been rallying. Oil Same.

For those watching closely… Interesting potential trendline break of the downtrend in Bitcoin BTC.

On this daily chart above, note the potential trendline break to the upside. Could be a good time to take a flyer in Bitcoin (If and when). BTC looks to be trying to hammer out a bottom with higher lows forming a small uptrend. The down trend started in November ’21 peaking at 69000. It fell to 32933.33, a 53% crash.

This latest crash in Bitcoin is similar to what transpired last summer. In April ’21 BTC peaked at 64899 and fell to 28800 marking the low in June ’21, a 56% correction.

Two scenarios I see playing out. 1.) BTC price “balances out” in market profile theory that simply means Bitcoin trades sideways at this level for a time, building value. 2.) BTC breaks the down trendline and starts a new uptrend. The ideal way to trade it would be to buy on a back test of the trendline after breaking above it then pulling back. The buy point would be the bounce of the line. See the red arrows below.

A prudent stop loss could be entered if the price falls below the secondary uptrend line. The bearish price action could continue as it seems Bitcoin is positively correlated with the equity markets. It will be interesting to see if Crypto prices can decouple from equity price movement.