Bitcoin: That’s A Huge Wick
Further evidence of a bull market present. Altcoins are performing just how they should in an expanding market.
I am writing this during the overnight session (2330 PM Central Standard Time). Bitcoin has had a pretty strong and persistent drive up over the past week or so. We need to remember that Bitcoin gained +47% (+2,673$) in a 9-day period. That’s a pretty damn fast move for Bitcoin. There are two important factors that told traders that a pullback was imminent. First, was the point of control. If we look back at the Volume Profile year-to-date, we see that the Point of Control is at 6400. Second, the daily Kijun-Sen in the Ichimoku Kinko Hyo system is at 6600. These two technical indicators have a shared trait that exacerbated the move this evening. Both the Point of Control and the Kijun-Sen are sources of ‘fair value’. It helps to think of price being attached to the Point of Control and the Kijun-Sen by a rubber-band. The further price moves away from those level, the harder it is to continue moving away and the higher the probability of price ‘snapping’ back to those levels. On the chart below, we can see the massive wick indicating selling was halted – strongly – against that shared value area of the Kijun-Sen and Point of Control.
Huge Wick, Dip Bought
Take a look at that volume bar. It is the single largest hourly volume bar of 2019. In fact, that hourly volume (at least on Coinbase) is the largest single hourly volume bar since 2016. Yes, that is correct, 2016. I hesitate to call this a ‘flash crash’, but in cryptocurrencies that is the phrase often used for a move like we just saw tonight. To me, this is one of the most bullish events we’ve seen since the Fall of 2017. It’s bullish because buyer stepped in by the thousands to propel Bitcoin and absolutely slaughter any bears. The amount of new short sellers that came into the market in a short amount of time was massive – and equally massive was their obvious margin calls. In other words, some accounts were probably wiped out in an attempt to short. I can’t help but think there is some comedian at the helm of that move because it was a -15.77% drop in a very short amount of time and the loss was – get this: -1234.56. Also, the low was at 6600 even. Overall, I am pretty excited about this move. I am loving the fact that the altcoin market is still on par with Bitcoin and in many cases its outperforming Bitcoin. These are the exact conditions we want to see moving forward.