Today’s economic reports show some incremental progress in the FED’s fight against inflation. Theoretically, that should counter some of the effects of FED Chair Powell’s hawkish tone yesterday, but so far that hasn’t materialized in the form of positive price action. In fact, Bitcoin price is moving lower.
The Killer Whale Game influenced volatility we’ve seen this week has literally developed precisely as scripted in my analysis over the past several days, but now that the FED related data and drama has ended, we might start seeing something different develop in the charts, so rather than focus on the unknown variables, I’m going to focus on the technicals in the Bitcoin chart along with order book and order flow data in FireCharts to try to figure out where we go from here.
Opinions only. No financial advice.
The Bullish Perspective
The Macro Trend for Bitcoin remains intact
After a 2 day shakeout BTC ETF flows are back in black
Leveraged longs down to $67k have been liquidated. It’s common for a short squeeze to follow
BTC has a solid test of support at the 50-Day Moving Average and we are headed for a retest
Another ladder of BTC bids have appeared from $58k – $65k
More BTC bid liquidity is concentrating above $66k to potentially defend from a lower low
Whales are still feeding
The Bearish Perspective
Liquidity based resistance from $70k – $75k is heavy
Blocks of ask liquidity are moving down to suppress price
BTC bulls have failed repeatedly to validate an R/S flip at $69k
We lost the 21-Day Moving average and the 100-Day Moving Average
Bid side liquidity based support is not nearly as large or concentrated as the ask side
Summary
For me, very little has changed. Whales have ping ponged the range and managed to shakeout weak hands 3 or 4 times in the past 30 days. After a flush to $66k questions remain about whether that level will hold or if whales will go after $65k, or potentially lower. I have a theory that the greed whales with leveraged shorts above $70k are the ones suppressing price in an attempt to push Bitcoin lower for a more profitable close. Whatever the case, the net effect of price suppression ultimately compresses the range until something breaks. If we break to the upside there is a lot of ask liquidity above $70k with a really heavy concentration of resistance between $71k – $72k. If we break to the downside, there isn’t a lot of liquidity stacked at $65k to keep the range elevated. If we lose $65k, I don’t have a lot of confidence in $60k unless more bid liquidity shows up there. If bulls lose the historical $58k – $60k range, then book your tickets for a trip to Bearadise.