Daily Report – Bitcoin and Market Update (October 28 2020)
Daily showing bigger signs of weakness after touching perfectly resistance marked in the chart long time ago, at which we did expect a local bearish reaction. Conservative target of the bull flag breakout was reached. It still doesn’t have to be major top anywhere here as a new high over 13800-14000 area has been expected. Local distribution dump is unquestionable and 1000$ movements happen due to big profit taking from whales. In spite of this fact, there still might be blowoff top somewhere in 14600-15000 area in case dips are bought back quick and daily closes in relatively bullish candle. Im still having my 12395 bids and 12.2-12.6k is where I would bet for a big support. Subsequent supports are 11.5k and 10400, yet the last one is rather improbable to see unless unpredicted FUD-driven news over US elections comes. I don’t recommend shorting exponential rallies EVER. Instead, focus on building a new long position on the retracement. In bull market, that’s exactly what the dips are for.
As given in the daily timeframe analysis, local top has been just met and it doesn’t necessarily need to mean bigger 3000$ worth of reversal. Currently price action wise, key support happened to be met at MA50 12.8-13k zone that is confluent with a volume profile spike at that levels. VWAP (Volume Weighted Average Price) key intraday support at 13.3k was broken with series of bearish raindrops. Volume profile visible in the raindrop structures is clearly showing that the dumping was not accidental and it was perfectly planned with heavier distribution of profits, which proves that 13-14k area once again is a very important historical supply zone, at least for short-term this time. Price action is forming broadening wedge pattern, which in case of breakdown would bring 500-1000$ down movement below MA50. Key level to hold in the entire short-term chart right now is 13000. Distribution process is getting stronger and stronger with every sideways movement, which means that we are close to a bigger MTF retracement. Seasonality of bitcoin most often proves that periods of 2nd half of October until 2nd week of November have usually been more bearish and corrective with super strong upside pressure lasting from 2nd half of November until end of the year. As we approach US elections, the volatility can be expected to grow rapidly, which could accelerate profit taking distribution processes on short-term overvalued assets, that bitcoin is getting to be. It may still reach 14.6-15k area to establish new high and absorb the liquidity on top to ensure little spread on realizing multi-million $ profits with little slippage. It’s needed for whales.
To sum up:
13-14k is not the best zone to long and dumping pressure growing with every local sideways mean that it’s good to realize profits, at least significant portion off the table. Unrealized profit is no profit. 13800s resistance marked in the chart weeks ago may be the top, but 15k+ targets are still ON the table within next 2 weeks. No matter this is the top or not, it’s unreasonable to sit in longs, keep longing and not taking any profits. For those who keep doing so, they will end up heavily underwater in the matter of few next days. 13k support is key locally. If it remains held, 14.6-15k is on the table. If daily/weekly closes below 13k, then 12.2-12.6k and 11.5k levels are unlocked to place bids at. If it it’s not topped out yet, it will be very very soon. If bitcoin dumps further, altcoins would likely firstly take hits and decline, then subsequently would absorb some capital and altcoins would bounce. Stay safe and reasonable.