Daily Report – Bitcoin and Market Update (November 11 2020)
Middaily sessions have been enclosed in the form of a contracting consolidation under the resistance. Usually consolidation under a resistance is considered more bullish than bearish when it occurs after strong upthrusting rally. As you know from my last Monday’s weekly report, 15.5-16k supply is expected to provide distribution area until a proper reliable breakout retest sequence above 16k to bring chances for any further expansion locally. As you know per my new cheat sheet, ATH is inevitable, but it definitely has ultra low chances it ever happens in a single move. Instead, the market often provides traders with corrections/retracements that can be used to re-enter or add to position. After exponential rally of 6k movement, past few days have shown that the final local top is yet to be established most likely. Current consolidation would be expected more likely to break up rather than break down. At the same time, the sentiment is extremely greedy with tonnes of unrealized profits. This is a perfect environment for whales and institutional inverstors to trap retails with fake breakouts to ensure liquidity and little slippage while market dumping millions of $ worth of bitcoin. So if any upside breakout occurs it is very likely to see a massive market selling distribution right following the breakout pump.
Most extreme scenario with the most aggressive breakout achievable brings smashing through 16k supply in form of short squeeze with very dangerous and volatile blow-off top at around 18k. Personally, I don’t think it is vastly probable and instead I would expect a correction to lower supports at 14.9k, 14.1k, 12.4k or 11.7k.
MTF picture reveals the symmetrical triangle type of consolidation. Local volume profile analysis suggests that PoC, the most important volume-averaged price level is 15430 support that combined with local VWAP 15350 gives a cluster of strong local supports. If the support is broken down and rejected on the retest as a new resistance, following through MA50 support, then the next support level is 13100 MA200. Unless the breakdown occcurs, it is currently more likely to expect intraday upside breakout with very high chances of massive dumping coming right after, which could confirm the local reversal towards 12k area. Beware and suggestedly long only breakout retest over the symmetrical triangle. The ultimate condition for any bullish expansion is for the retest to be held as a new support. Otherwise, it’s just a typical fakeout followed by massive dumping and whales realizing profits. As suggested dozens of times before already, it is FORBIDDEN to short sell this exponential rally. In bull markets corrections are to provide you with compounding/reloading opportunity not with shorts, as the corrections are usually short-lived. Instead, if you took profit before and completely closed longs prematurely (but still taking huge profits off the table with us) focus on deciding what’s the safest re-entry zone. Until LTF supply zone is broken and reclaimed as a new demand zone after breakout retest, only scalpers may enjoy current price action inside the symmetrical triangle. Long-term traders are set for ATH anyway. LTF-MTF traders should optimize their risk/reward ration while opening longs anywhere around and for such trades VERY strict risk management must be introduced. By longing into the key resistance area, you are risking buying the top. Your task as a trader is always to minimize the risk and maximize the profit.
To wrap up:
Past few days of price action have shown no reversal spikes or blow-off top so far. Instead market has presented us with more steady contracting consolidation of narrowing volatility. Within the next hours until Friday, I would expect a massive volatility return and massive movements. No matter the breakout direction, it would most likely hurt altcoins as the intraday shock. It is suggested to book profits off the table before whales decide on the market direction for the next days. IMO the most probable scenario is fake breakout towards 16.5k PROVIDED THAT daily raindrop closes above the triangle high resistance. Until 16k supply is reclaimed successfully as a new demand zone, the only trades that can be taken “safely” are intraday long scalps. Please stay reasonable and avoid longing right into the resistance, no matter the timeframe. Key support to hold on intraday is given 15430-15350. Make sure you deeply analyze my newest BTC cheat sheet revealing why I think BTC is set to go ATH!