BTC/USD - A TEST OF PATIENCE! – Innovation Markets


Following a sudden jolt of fresh bullish momentum heading back into the market and the largest bullish weekly candle seen since the 30th May, we begin to yet again see $100K price predictions and the “bottom is in” crowd screaming from the rooftops.

From the Weekly Perspective of the BTC/USD chart, we can see things are beginning to look promising, but it doesn’t mean we lose composure and get ahead of ourselves yet. The prior $20,000 2017 ATH was our first targeted region given to members from the $69,000 handle, a level that would inevitably be revisited upon a break below the critical $30,000 support floor. Over the span of 4 weeks, price achieved a deeper pullback towards our member-given zone of $17,000, showcasing early signs that BTC was starting to find stability following it’s meteoric downside destruction.

The 200 SMA shown on the weekly timeframe has historically been the key indicator to identify potential turning points within the market and future price targets for market makers to pursue driving price towards. With millions of traders across the world observing these patterns, naturally everyone is inclined to believe a new bull run is underway. Following 3 weeks of price stability around the $20,000 handle, this assumption is being reinforced by BTC’s inability to retest the fresh lows printed at the $17,600 floor.

The market dynamics are evolving heavily, we are seeing an entirely different structure and operation of market movements in comparison to existing cycles. This is something to be cautious of and a reminder to not get overly excited just yet. A large vacuum of empty space remains below the $20,000 floor where price has yet to come back and ‘fill-in’. You’ll note market dynamics shifting from heavy bursts of bearish momentum, followed by extended periods of consolidation, followed by even stronger bearish momentum. Whilst bulls are fighting back and slowly regaining power, it’s unlikely that the bears are finished wrecking havoc just yet.

Price remains range-bound within the weekly range of $20,000 - $22,500 and at present has simply driven higher to respect the upper spectrum of this range to attract more buyers. We’re currently in a phase of constant liquidations of both long and short positions before the going gets good.

As shown on the Daily Timeframe, this drive up has started creating the illusion of an invincible and near-perfect $20,000 support, naturally bringing in a huge collective of leveraged buyers back within the market hopeful to catch the ‘falling knife’. Stop losses will be flooded below the $19,000 territory especially, with the current drive higher luring more buyers in as they desperately seek a new bull run to commence. With this in mind, the current drive towards the $22,400 handle has now successfully wiped out leveraged short positions as the 26th June highs have been taken out swiftly, fulfilling the outstanding retest of the broken $22,000 support turned resistance in the process. With shorters anticipating the $12,000 handle now wiped, buyers confidence is building around these levels, which we believe to be another trap.

Take note of the 26th June wick at $21,734 mapped out on the Daily Chart. Seeing Daily candle closures below this level will strengthen the positions of bears seeking to regain control of their overall dominant momentum and now pursue the stop losses of premature leveraged long positions beneath the $19,000 handle. Whilst a little more trickery can initiate around these levels, inevitably price remains bearish and all signs point to another drive to the downside.

Whilst things are slowly moulding and preparing for a surprise upside burst of bullish momentum, the focus remains on more downside for the time being, where traders must remain cautious of price seeking to wipe out the freshly printed lows and pursue a descent towards the $17,000 - $16,000 territory. This will create a frenzy of new fear plaguing the market, and will result in bulls returning back to EXTREME FEAR as the short-term bullish momentum yet again proves to be another trap amongst a series of many more to follow.

Remember one thing, it’s never as simple as a single rejection of support and then moon. Traders are at their most vulnerable and emotional right now, market makers will be seeking to play on these emotions heavily before the true fun begins and bullish momentum returns once again. Do not try and trade this mess, sit back and allow the market to present greater signs, which should be coming soon in the form of another bearish leg lower.