What you need to know about being Bullish!
As a long time trader and professional investor, it's been awesome seeing the evolution of Bitcoin. It's a place for influencers to say stupid things like Bitcoin to 100k or 250k without any real merit or logic behind such a price point. Often the analysis consists of a handful of useless lines drawn from nowhere to somewhere of interest on the chart.
To understand what Bitcoin and the larger crypto market is doing, doesn't take a lot.
Especially as it becomes more and more institutional. I've talked about this for a long time here on TradingView and showed each step of the way.
These moves are not as random as they appear.
There's a great book by Richard Ney, actually he has a couple talking about market makers and the effect on the markets. However, one little snippet he talks about how the market or a stock/instrument such as Bitcoin can be seen as a warehouse, think of the scale and number of shelves. Now think of the length of time to fully stack that warehouse. This isn't a quick factor...
Now break that idea down further & apply it to BTC. If the market makers are the owners of the warehouse, who do they sell to? Well retail of course. The issue is retail simply do not buy in bulk. Once retail get the urge to buy, the warehouse stock gets depleted 'over time'. In addition the market makers need to stock back up. So for them, they need to buy cheap and sell higher.
Trading 101
Over the last couple of years, I have shared a chart showing COT data, this is a US based sample size of in essence what the market makers are doing. The data is slow and clumpy, it's lagging much like all the other indicators - maybe even more so. However, that does not matter as all you are looking for is a general bias.
You only need to look at Larry Williams who won the Robbins World Cup Championship of Futures Trading, COT data is a key part of his strategy.
I've written several posts here covering the topic in more depth, but here's the current snapshot.
Asset Managers:
This image clearly shows a long, long term bias.
Next you have the Leveraged Funds:
This image is almost the inverse, we have a negative delta shown. Now in the past I have had people say to me "ah look, institutions getting REKT. Price going up and their short" What you need to understand is how this works. Let me ask you this "Who is selling to you in the rally" Well the guys who bought it cheaper.
So here's the lesson:
The factors for Bitcoin currently are pretty simple; you have a long term Bullish bias as seen by the Asset Managers. You have a shorter term Bearish bias of the Leveraged Funds
Therefore we can look at some other factors. Let's start with a zoomed out view of the market - let's go to a Monthly timeframe.
What do you see? Well, I see an overbought stochastic, I also see price moved up as volume fell down (more visible lower TF's). To translate this, the accumulation for the bigger picture is not quite over. Influencers think we are resting on 30k to rally to 250k next week. Unfortunately for their Demo accounts, the market doesn't think like that. Nor do the market makers!
Next you can also dig a little deeper into things like Dark Pools again I have covered this in another educational post.
As this is an educational post, let's put all of the pieces together.
1> COT data shows Leveraged Funds still have positions to sell
2> Asset Managers have a Bullish Bias
3> Monthly stochastic overbought
4> Volume doesn't match the move up
5> Dark pools... How much is being soaked up under the radar?
In the TradingView show back in May, I covered Wyckoff and Elliott and a little about composite man (market makers).
tradingview.com/streams/WDxxroSNgb/
When using such tools and techniques, the price becomes obvious. Why up or down and at what key levels.
Moves like this are pre programmed into the liquidity algorithm.
Things you can spot from miles away.
So let's finish on putting it all together - The conclusion would be, we are early on in an accumulation phase, we need to stockpile the warehouse to have momentum to newer highs. IF we go directly here we are capped - think of it like fuel in the tank.
I have talked about this on several of my streams here.
Coupled with the current view of the overall economy.
This doesn't have to be difficult.
I hope this helps some of you out.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
To understand what Bitcoin and the larger crypto market is doing, doesn't take a lot.
Especially as it becomes more and more institutional. I've talked about this for a long time here on TradingView and showed each step of the way.
These moves are not as random as they appear.
There's a great book by Richard Ney, actually he has a couple talking about market makers and the effect on the markets. However, one little snippet he talks about how the market or a stock/instrument such as Bitcoin can be seen as a warehouse, think of the scale and number of shelves. Now think of the length of time to fully stack that warehouse. This isn't a quick factor...
Now break that idea down further & apply it to BTC. If the market makers are the owners of the warehouse, who do they sell to? Well retail of course. The issue is retail simply do not buy in bulk. Once retail get the urge to buy, the warehouse stock gets depleted 'over time'. In addition the market makers need to stock back up. So for them, they need to buy cheap and sell higher.
Trading 101
Over the last couple of years, I have shared a chart showing COT data, this is a US based sample size of in essence what the market makers are doing. The data is slow and clumpy, it's lagging much like all the other indicators - maybe even more so. However, that does not matter as all you are looking for is a general bias.
You only need to look at Larry Williams who won the Robbins World Cup Championship of Futures Trading, COT data is a key part of his strategy.
I've written several posts here covering the topic in more depth, but here's the current snapshot.
Asset Managers:
This image clearly shows a long, long term bias.
Next you have the Leveraged Funds:
This image is almost the inverse, we have a negative delta shown. Now in the past I have had people say to me "ah look, institutions getting REKT. Price going up and their short" What you need to understand is how this works. Let me ask you this "Who is selling to you in the rally" Well the guys who bought it cheaper.
So here's the lesson:
The factors for Bitcoin currently are pretty simple; you have a long term Bullish bias as seen by the Asset Managers. You have a shorter term Bearish bias of the Leveraged Funds
Therefore we can look at some other factors. Let's start with a zoomed out view of the market - let's go to a Monthly timeframe.
What do you see? Well, I see an overbought stochastic, I also see price moved up as volume fell down (more visible lower TF's). To translate this, the accumulation for the bigger picture is not quite over. Influencers think we are resting on 30k to rally to 250k next week. Unfortunately for their Demo accounts, the market doesn't think like that. Nor do the market makers!
Next you can also dig a little deeper into things like Dark Pools again I have covered this in another educational post.
As this is an educational post, let's put all of the pieces together.
1> COT data shows Leveraged Funds still have positions to sell
2> Asset Managers have a Bullish Bias
3> Monthly stochastic overbought
4> Volume doesn't match the move up
5> Dark pools... How much is being soaked up under the radar?
In the TradingView show back in May, I covered Wyckoff and Elliott and a little about composite man (market makers).
tradingview.com/streams/WDxxroSNgb/
When using such tools and techniques, the price becomes obvious. Why up or down and at what key levels.
Moves like this are pre programmed into the liquidity algorithm.
Things you can spot from miles away.
So let's finish on putting it all together - The conclusion would be, we are early on in an accumulation phase, we need to stockpile the warehouse to have momentum to newer highs. IF we go directly here we are capped - think of it like fuel in the tank.
I have talked about this on several of my streams here.
Coupled with the current view of the overall economy.
This doesn't have to be difficult.
I hope this helps some of you out.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
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