Whales Clearly Accumulating on Bitcoin


5 min read
Whales Clearly Accumulating on Bitcoin

We've taken a little break from our normal Bitcoin price analyses as the market has consolidated as well.

Checking in Our Former Idea

Sadly that was a dud (see below):

The loss here is hardly anything to cry over though:

And that's what great risk / reward management will get you (yes, I converted this into a 'win' for myself even though the trade was 'incorrect' because growth comes in acknowledgment but not defeat. Thanks.)

Now let's move forward and check out what the chart is showing us at the time of writing.

Bitcoin Price Analysis

First thing to outline is the underlying (horizontal) support that was established by the price during its consolidation over the past week.

See below:

If we zoom in a bit closer on the daily resolution, we can see the price has gained a little bit of momentum from that underlying support point at $10k, but not much.

Price apprecation of approximately +3.26% (meh).

Volume is Slightly Concerning However

The volume diverges negatively with the price on the daily resolution.

What is Negative Divergence?

Its exactly as the name implies, a divergence between the direction of the price and an underlying indicator (in this case, the volume).

Per Investopedia

"Divergence is when the price of an asset is moving in the opposite direction of a technical indicator,such as an oscillator, or is moving contrary to other data. Divergence waarns that the current price trend may be weakening, and in some cases may led to the price changing direction."
src: https://www.investopedia.com/terms/d/divergence.asp

Given this information, we need to take note of the volume divergence.

What Does Negative Divergence on the Volume Mean?

On a surface level, it means that the volume has decreased as the price has increased (like we see on the chart above).

Generally, this is a bearish sign.

An old forum (won't link it here) provides an excellent overview of the implications of the volume diverging (negatively).

Librehash Double Guppy Channels (custom indicator)

Take a look below:

Curiously, we can see the price bounce from the bottom of those double guppy channels (which is actually a positive for bulls here).

Generally when the price hits the bottom of the traded channel of the Double Guppy, there is a correction toward the "center" (orange part in the middle) as the price adjusts.

The guppy channels were coded so that the price could never exceeded the top or the bottom of the channel. Therefore, if we do see the price at the bottom of the channel (or the top), that means that its trending at a "session low" or a "session high".

These channels were created using MA (EMA specifically; exponential moving average) indicators ranging from periods as small as EMA-8 to the EMA-200 (I believe, I would need to check the code again, just going toff the top).

That means that the outermost 'shell' of these guppy channels represents the session high or low among all of those lookback periods (cumulatively).
Since this range is in a constant state of fluctuation, a color gradient was applied as well to show whenever there is a shift (i.e., 'faster' periods crossing over the 'slower' ones & vice versa, then I color coded them both accordingly).

Librehash Reversion Ribbon V2 (custom indicator)

The Librehash Reversion Ribbon V2 is showing something very sexy at the time of writing (9/12).

It appears that the Reversion Ribbon V2 is right on the precipice of signaling to us that Bitcoin could be a viable entry on the daily resolution.

See below:

Balance of Power RSI (custom indicator)

Look at the surprising results that we found on the Balance of Power RSI

What we see above is actually really significant.

It means that the buy pressure has shot through the roof over the past week on the daily resolution.

When considering the fact that Bitcoin is at $10k-$10.5k (at the time of writing; trending towards a session high), it appears that 'whales' (as folks call them) have been accumulating around this price range - which means that the "bet" of the market is in the direction of a bullish continuation back up north.

Librehash Volatility RSI

In the same way, the volatility RSI appears to be signaling its intent to curve back ever upward in the northern direction as well (which is another extremely bullish indicator of impending future price direction).

Conclusion

Bitcoin looks poised to head back north and test the bears for hard earned territory that was gained by them (and held) following the blow off top in Bitcoin's markets December '17.

Here's the R/R on that trade:

Go big or go the fuck home. We're targeting the $12k range ; our S/L is circa $9.7k (which is a steep drop for the price from where we are currently and well below where I anticipate bears will be able to throttle bulls back to (especially after having already beaten them back this far - which was really just a punishment on a bunch of traders in over-extended long positions)

GO TOP