BTCUSD: Potential Fractal and Continuation of Downtrend
Updated
BTC has been rejected once again at the top of its current 9-day consolidation range. Since we're still technically in a macro downtrend (lower highs and lower lows ), we're looking for short setups.
Temporary support has been found at the middle of our range and 4-hr reversal zone. We're not looking to take a long back up to the top of the range as the R/R is not there, however let's watch closely for another shove up to the supply zone (higher grey box) to build a short position with an initial PT at the bottom of our current range and a final PT at the daily support level from October 17 (roughly 5.5k).
We've seen a similar fractal play out in May/June as the market baited traders to close shorts and build longs to create liquidity for another shove down. Let's see how this plays out.
Temporary support has been found at the middle of our range and 4-hr reversal zone. We're not looking to take a long back up to the top of the range as the R/R is not there, however let's watch closely for another shove up to the supply zone (higher grey box) to build a short position with an initial PT at the bottom of our current range and a final PT at the daily support level from October 17 (roughly 5.5k).
We've seen a similar fractal play out in May/June as the market baited traders to close shorts and build longs to create liquidity for another shove down. Let's see how this plays out.
Note
Asks filled at an average of 6526. The last push up (large spike to bull flag at resistance) followed a common market pattern that we've started to see over the last few months of the bear market. In my mind these patterns are designed to bait longs to enter the market to create liquidity for distribution. The fact that we're seeing them here provides a higher probability to the fractal we have in play.
Furthermore, the Bitmex funding rate has shifted positive, meaning that there is currently more long than short interest on the platform (very different than Bitfinex). This is good news as it means there could be a run on sell stops which could be enough momentum to take us down through the 6350 support level.
That being said, If we bounce at 6350 again with convincing volume, I'll be moving my stop-loss to breakeven and looking for another entry in the low 6600s.
Note
This position playing out as planned, however due to the upcoming Bitmex maintenance I've close this short and will sit flat until Mex is back online. IMO it's always best to play it safe when there's this much uncertainty. I'll reevaluate opening another short position afterwards. Stay safe everyone.
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