After , I got the sense that BTC hasn't bottomed yet despite many calling the bottom. So I started looking for other indicators and pieces of data that may corroborate this hunch.
Initially I started looking at the long (BITFINEX:BTCUSDLONGS) and short (BITFINEX:BTCUSDSHORTS) positions on Bitfinex as a way to gauge when to exit my margin positions. However, as I went back over the data we had (which admittedly isn't a great deal as Bitfinex only started providing the data on the 20th of August 2017), I started to notice that we topped out at around 32k of BTC longs. This coincided with a couple of major selloffs, including the last drop from 12k, and the prior one from 20k.
Im not sure if this is a glass ceiling, or a hard cap, however it seems pretty clear to me that we are seeing divergence of BTC price vs number of long positions. ie. price is going down despite an increase in longs.
I feel this provides some evidence towards the idea that we will push considerably lower due to a "long squeeze".
I also mentioned a few days back in my prior post that if we close the week below the weekly 20EMA, we will head lower to the 50MA for support.
A few days back
Now
I believe we are going down to between ~6k (+/- 500).
評論
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A clearer example of the divergence:
評論
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So the weekly just closed and it is not pretty:
* Lower intra-week low * Lower close * TD on a 5
These are some more indications that ~6k is a potential.
評論
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We are now below the daily 200MA. Look for a close below it to confirm going lower:
評論
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So we dipped into 6k over the past 8hrs or so, which wasn't a surprise if you have been following my updates.
Looking at the weekly, this still has the potential for lower lows; somewhere in the range of 4k - 6k (I know this is big, but I'll tighten it up as I get more data).
Once thing I have noticed going back to the original idea of margin longs being an indicator, is that I'm starting to see a fractal pattern:
Key things to watch for: * Increase in longs above 31k * Price differences vs longs ie. price decreases as more longs are opned
This could set up another long squeeze.
交易結束：目標達成
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So we reached the price target of ~6k from the original idea, so I will close this out.
I still have some concerns that longs are over leveraged. But we will see what happens once they start closing.
What would be ideal is if we close the week >9k, which would form a hammer candle, which would indicate a reversal.
I'll create a new idea soon to indicate where to next.
The only scenario that would make this week better is if it went down to ~6k and then closed back up >9k, forming a hammer. That would give a really strong indication that we should have a reversal on our hands.
josephtse
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@crimsonr, That's one possibilty and that's the only way it reverses. We've already breached the 3-year long-term trendline at 7800, and just failed the underside resistance of it, so it's pretty much game over mate.
cubantobacco
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Wow, 35k longs at the moment. This is gonna drop like a dead puppy
josephtse
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You don't think it will form a triple bottom around 7800 first? I think it is providing support for now until tested 3 times and then it will crash to low 7000s.
crimsonronin
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@josephtse, Yes, I think you are onto something. I believe 8k will play out in a similar fashion to 10k ie. it will continue to test it for support until it breaks.
I've been working on this;
If "C" is rejected, I will update the idea as I will have a better understanding then of fib levels and targets etc.
crimsonronin
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@crimsonr, This has been invalidated.
We did test 8k multiple times, but it was no where near as strong as 10k (that was a much bigger psychological barrier; 5 digits... big round number etc).
josephtse
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@crimsonr, You nailed it, just accelerated fashion. What happens next now?
crimsonronin
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@josephtse, Thanks mate. It happened very quickly, which is what happens when longs increase, but price doesn't.
We hit the targets in the idea, so I think I'll close this one out for now.
It still seems longs are over leveraged though. I will have more confidence if longs close and price still increases. As I said in the below comment, the ideal scenario would be hitting 6k then closing >9k. We already hit 6k, so by the end of this week we need to close above 9k.
Ill create a new idea to look at the smaller trend rather than the bigger picture.