Why Bitcoin is Moving the Way it is
Actualizado
The movements of Bitcoin have become more and more odd as volume in the crypto market decreases. Many people call this "manipulation". What's really happening is that large players, in search of liquidity, have to go chasing after leveraged positions and stops to find it. In the chart you'll notice an indicator showing longs vs shorts. The last time shorts outnumbered longs they got chased and squeezed, and we went up. There was then a round of fomo and money coming in that kept us going up for a while.
Since the 10K peak, market cap started draining out and the liquidity chasing game began again. Longs have outnumbered shorts, and they have been chased, resulting in the price going down.
In the last few days we've gone down so fast that shorts started to pile on and you'll notice that we've seen some sudden moves upward in response. This is very obvious in the charts when you see a "Bart Simpson" head where, just before the market looks like it's about to fall, it shoots upward causing a short squeeze, letting those in the know buy shorts at a good price, then the price crashes down.
You'll notice the reverse right before the huge short squeeze on April 12: price shot down quickly taking out a bunch of longs. If you knew what was happening and were quick enough you got some very cheap crypto right before it shot up.
I think we're going to keep doing this (and going down mostly) until the longs have been eaten up and everyone's afraid to long Bitcoin anymore. When some tipping point has been hit, a cascade of selling will occur resulting in a panic crash. I hope I've got the balls to buy at that point!
Then the only place to go looking for liquidity will be the shorts, and we can begin a new bull market. However, it might take a long time for a new batch of fresh money to come in after what we've just seen, time will tell.
This is not financial advice! I'm a noob and writing this mainly for my own reference. If it's helpful to someone else I'm very happy!
Since the 10K peak, market cap started draining out and the liquidity chasing game began again. Longs have outnumbered shorts, and they have been chased, resulting in the price going down.
In the last few days we've gone down so fast that shorts started to pile on and you'll notice that we've seen some sudden moves upward in response. This is very obvious in the charts when you see a "Bart Simpson" head where, just before the market looks like it's about to fall, it shoots upward causing a short squeeze, letting those in the know buy shorts at a good price, then the price crashes down.
You'll notice the reverse right before the huge short squeeze on April 12: price shot down quickly taking out a bunch of longs. If you knew what was happening and were quick enough you got some very cheap crypto right before it shot up.
I think we're going to keep doing this (and going down mostly) until the longs have been eaten up and everyone's afraid to long Bitcoin anymore. When some tipping point has been hit, a cascade of selling will occur resulting in a panic crash. I hope I've got the balls to buy at that point!
Then the only place to go looking for liquidity will be the shorts, and we can begin a new bull market. However, it might take a long time for a new batch of fresh money to come in after what we've just seen, time will tell.
This is not financial advice! I'm a noob and writing this mainly for my own reference. If it's helpful to someone else I'm very happy!
Nota
Getting mixed signals at the moment. The way the chart is arcing downward on the lower time frames doesn't give me much confidence that BTC will wait for the 4hr and daily moving averages to catch up before dumping again. However, there are some bullish signs that those holding shorts should beware:1. Shorts have shot up 7% today, and are close to overtaking longs. If that happens, the chase for liquidity will shift upwards...
2. The chart setup for MACD, RSI, Stoch, and moving averages favors a move up. The spring has been coiled by so much downward pressure.
In the 2014 crash, there were several times the chart had a similar setup and it kept going down. Nevertheless, bears should be on guard for signs that the tide is changing and be ready to go long.
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