BTC- Consolidation
Price action this weekend and through today shows price descending in a channel with a very common pattern. Price moves up to a predictable level and then "bam" hard selling moves the price back to a predictable level very quickly. In my years, I've come to see this as professional selling - smart money selling. There is definitely not enough demand at 50K to push above this selling. Key on-chain metrics also support this:
1. Large BTC addresses have not grown - recently there was a move from 2141 addresses to 2155 but that was not sustained.
2. An abnormal number of older coins are coming to market. Usually its coins <1yr that dominate the market.
3. Futures contracts are stacked above 48K creating large resistance - big money that sells futures contracts do not want to pay those call out.
4. Hash rate has just not rallied like it should. Its only 75% of what it was at this price earlier this year.
I've taken a defensive stance once price failed to push above 50k. I continue to trade the channel. Eventually, that will break down and provide some further guidance where BTC is headed. None of the short term key metrics have been broken so I'm staying short term bullish, but defensive.
My instinct is that professional sellers are laundering large orders which is in line with my cautiousness. I'm optimistic, however, because the market is orderly. Its not a mad rush to the door like May. This consolidation is a bit volatile right now, but I'm watching for that to settle and the trading range narrow. The daily charts summarize my position best - we are forming a classic cup and handle. Its one of my favorite trading patterns. The handle should not be more than a 50% retracement, but it takes a while to form a proper handle.
1. Large BTC addresses have not grown - recently there was a move from 2141 addresses to 2155 but that was not sustained.
2. An abnormal number of older coins are coming to market. Usually its coins <1yr that dominate the market.
3. Futures contracts are stacked above 48K creating large resistance - big money that sells futures contracts do not want to pay those call out.
4. Hash rate has just not rallied like it should. Its only 75% of what it was at this price earlier this year.
I've taken a defensive stance once price failed to push above 50k. I continue to trade the channel. Eventually, that will break down and provide some further guidance where BTC is headed. None of the short term key metrics have been broken so I'm staying short term bullish, but defensive.
My instinct is that professional sellers are laundering large orders which is in line with my cautiousness. I'm optimistic, however, because the market is orderly. Its not a mad rush to the door like May. This consolidation is a bit volatile right now, but I'm watching for that to settle and the trading range narrow. The daily charts summarize my position best - we are forming a classic cup and handle. Its one of my favorite trading patterns. The handle should not be more than a 50% retracement, but it takes a while to form a proper handle.
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