Halving passed and the price of bitcoin found a very strong structural support in the $ 10,000 range. Today I bring you a study on possible current and future price movements, remembering that this study does not bring any type of buy or sell signal, it is just a personal study that is being shared for educational purposes.
Starting on the weekly chart we can see some positive factors right away. The closing of last week's candle was great as it managed to close above the closing of the previous week (which showed indecision) in addition to breaking the resistance left at $ 20,000 (we still need to know if this week's candle will remain in this region), all averages furniture visible in the graph (8, 21 and 55 periods) are inclined positively and so far the price is finding support in the resistance traced in pink.
As I still consider that we are at the beginning of a bull market and that we will still have some kind of correction deeper than that test in the $ 8,000 range, I bring you some possible correction scenarios that occur and occurred in the bitcoin bull market.
The possibility of a diagonal channel is possibly the worst thing that could happen for the continuation of the trend at the present time, if this possibility occurs, we can see an exhaustion of the buying force as funds are formed. With each test in the lower zone of the channel that would be formed, it implies that there is the bottom causing mass buyers to enter, the price goes up and is rejected by making a new minimum, this cycle is repeated in order to decrease more and more the volume in addition to making the corrective process increasingly longer.
In this corrective possibility a channel is created where the price is lateral without losing important structural minimums, this can create some types of graphic figure both high and low, by the sketch I made above we could see something like a wedge that, if broken, tends looking for the bottom of the channel or an upside down descending triangle where the break would seek the next resistance above the $10,000 region.
Finally and the most common of the movements in a bitcoin bull market are deep corrections, strong and fast movements that correct a lot of the price in a short time in order to quickly recover the corrected price, tend to make those huge shadows on short charts period such as 1 day or less.
Bearing in mind all these scenarios it is important to adapt your portfolio to these possibilities.
I have already brought this behavior up a few times, but it is interesting to remember, whenever there is the so-called golden cross, the price of bitcoin tends to go against the moving averages (I am using the simple 55-period moving average instead of the 50 used in the common market) and we are very close to that crossing again, indicating a very strong downward movement that can be confirmed by the rejection in the current price level.
In return (or complementing) the analysis above we have the following report from CME:
Here in the CME report posted on May 12, we can see something that has not been seen for a long time: the position of "commercials", that is, the position of banks. The indication that banks are entering the bitcoin market and are buying long contracts gives us the idea that the price this month could rise and break the current high.
The big question is the number of contracts and the strength that the bank can have on individual traders, if you look further down in the report you can see that the number of traders in long is 42 (about 157.29 contracts for each trader = 786 bitcoins) plus bank 1 (exact 31 contracts = 155 bitcoins) and the number of short traders is 28 (on average 319.18 contracts for each trader = 1595 bitcoins), this alone shows us that short traders are betting much more than those who are betting on long, if short traders are whales and are betting more, why would they lose if they can manipulate the market so easily ?. Using the same logic, have you ever seen a bank go into trading to lose? Going into some private studies that I have already done, I noticed that whenever banks enter into a bitcoin operation at CME (regardless of "common" trader contracts), this causes a very strong move towards most bank contracts - they came in with thousands of contracts sold at the top formed at $ 20,000 for example - the point is that the number of contracts traded has increased a lot and in a way the market has also changed since the last time I noticed the presence of banks trading bitcoin.
All of this has to be taken into account from this moment on, thanks for reading this far :D