Bitcoin, a bullish week for good old BTC?

Like every week I come back on the analysis of the previous week (yes, I didn’t post last week, but I did in video) and then I explain you my vision for the week to come. Here we go! You can also find this article in video here.

Disclaimer: This article does not constitute investment advice or an invitation to invest. It is strictly for informational purposes only. You are solely responsible for the trading and investment decisions you make.

Debrief of the past week

Last Sunday I explained (in video) that we were going to have an eventful week especially with the US inflation numbers. The most likely scenario was to nibble away at the liquidity in the south without hitting the low point (in order to avoid a TP at $12k!) and then a return to the upside. We did have those liquidations, but for now, we are simply back to square one! Yeah, the market is pretty loose!

Zoom sur la mèche de jeudi et les liquidations impliquées !
Zoom sur la mèche de jeudi et les liquidations impliquées !

Now I’ll show you the points to analyze for this week, and I’ll give you my opinion.

Bitcoin on its way down?

The first big point is that the $18,800 support is currently being challenged.

Indeed, it is a support, because we bounce on it very often and it will continue to stay that way as long as people, with a lot of money, buy there.

Bitcoin – triangle et support

The concern is that if they run out of liquidity, who is going to hold the support? No one, and that’s why a descending right triangle like this one often tends to break from below. Here, it would be dramatic, because it would send us directly between $16k and $12k. Dramatic? Really? Not so sure for investors!

BTC on the way up (?)

Last week’s liquidations are a real boon! Indeed, the market has liquidated all the longs (except the one under the bottom of course!). If we had to push the low point, we certainly would have done so on this occasion, especially since the figures for the week were not especially good. However, not only did Bitcoin hold, but so did the SPX (500 largest US companies). The latter continues to sink, but by simply liquidating the longs. It is not going completely into the abyss, which seems to be a good sign (for now).

SPX liquidations are followed by a systematic rise
SPX liquidations are followed by a systematic rise

In addition, we have areas of shorts building up on Bitcoin:

Accumulation of shorts

The four red dots shown here are areas where people who bet on the downside have what is called a STOP. This stop can be one of two things, either they want to close their bearish position if it goes higher than these points, or they get liquidated (= they lose everything).

In both scenarios, this will create a buying force, as they will close their position, and this can lead to a short squeeze (=a big green candle).

Finally, if we look at the orderflow of altcoins (but what does it say???), we can see some interesting things! The orderflow is a set of data that allows to study the buy/sell positions in progress, it seems simple, but its analysis is complex.

Orderflow of Altcoins. From top to bottom: BTC prices, leveraged open positions in altcoins, altcoin funding, altcoin liquidations
Orderflow of Altcoins. From top to bottom: BTC prices, leveraged open positions in altcoins, altcoin funding, altcoin liquidations

Here, the important thing is to look at the Funding (3ᵉ rectangle). Indeed this one is very very red, which means that a lot of open leveraged positions are shorts, so downside bets. This reinforces the idea of a short squeeze also on altcoins.

Conclusion

There are actually, like every week, three scenarios, one down, one up, it doesn’t move. Yes yes, thanks for the analysis cheers.🤣 (editor’s note: and I pay him to write this kind of crap? 🙃)

However, they are all still worth considering and planning for. Of course, you can have your opinion to favor one.

In my case, I’m bullish on the week ahead.

My biggest argument is the price reaction from last week. We could very well have pushed the bottom and said goodbye to our hopes. However, we didn’t do that even though the numbers weren’t good, which supports my argument.

In my case, I’m all for a return to the next resistance which is between $21,000 and $21,500! Maybe it won’t happen this week? Maybe it will fall. It’s possible, but it’s not my preferred scenario!

Bitcoin target area
Bitcoin target area

This target area is an important resistance area, it has always provoked a reaction. So I am waiting for it once again. Of course as usual there is no advice here, just pure analysis of the favorite crypto asset! See you next week and wait don’t forget to follow Coinpri and read our latest guide!