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I consider myself to be a pretty goodtrader, and I know and associate with Bitcoin traders who are far superior to me. Still, no matter how good you are, we’re still all at the mercy of market makers and whales.
Open your YouTube app on July 16, and you would have almost undoubtedly seen every prominent (and legitimate) cryptocurrency YouTuber talking about how Bitcoin has clearly broken down out of its parabolic rise and/or pennant formation, and is due for a much-needed and possibly-lengthy correction to $8,500 or lower.
That sentiment quickly shifted after only one hour today, when a heinous thirty-minute green candle ripped the faces off of both those who shorted the bottom and those who shorted the breakdown below $10,000.
Bitcoin blasted from approximately $9,400 to $10,600, at the time of this writing, in blink-and-you-miss-it fashion.
(Not going to lie — this one has all but registered a loss in my trade book. I took profits on my short of the breakdown but those I let ride are underwater.)
That’s some serious price action — the kind that now has many YouTubers suggesting that the bottom of this correction may be in.
The truth is, you can’t predict these kinds of moments — nor should you. They happen because one buyer or a group of buyers decides to push the price up, for one reason or another. Make no mistake about it, this is not the result of organic demand or retail investors. This is a whale splash not seen since April 2, when the bull market officially commenced.
I was speaking to a good friend of mine who is a brilliant trader, fil₿fil₿, about this very topic. Namely: if all technical signs reasonably point down with perhaps a moderate reactionary bounce, what in the world is driving the price up so dramatically?
One possible conclusion (keyword: “possible”) is that somebody or somebodies are looking to fill their shorts at higher levels in preparation for a harder dump.
Take a look at the following chart:
It looks a lot like the previous chart, doesn’t it?
While the first chart is simply a chart of Bitcoin’s price on Kraken, this second chart tracks Bitcoin shorts on Bitfinex.
The price goes up, and the shorts go up. Coincidence? We think not.
This price action has both myself and BeInCrypto’s in-house technical analyst, Valdrin Tahiri, going short. (However, I am still extremely bullish in the long-term.)
I day trade, and I do a pretty decent job at it. Still, sometimes, you just can’t keep up with those who can genuinely move the markets. Those people will jerk you around when things get choppy, make no mistake.
Just take a look at this chart of Bitcoin’s hourly Stochastic RSI:
For those who don’t know, the Stochastic RSI is a momentum indicator that can present buy or sell signals based off the crossing of the two lines. Normally, it looks like the first half of the indicator shown above. Abnormally, it looks like the second half — with jagged buy and sell signals flashing at an almost-hourly basis and dramatic swings from oversold territory to overbought territory.
TL;DR, it’s been hopeless the last few days because, at the end of the day, those who can move the market will — and you won’t know about it ahead of time.
Be safe out there.
What do you think? Are whales looking to get their shorts filled, or is the bottom really in for this Bitcoin correction? Let us know what you think in the comments below! And if you think you can time the market, you can trade with a multiplier of 100x on one of our partner exchanges, StormGain, by following this link to register a free account.