djr0726

Long BTC to $25,600 Cognitive flexibility, required to shift one’s bias from bullish to bearish , long to short, and vice versa, based on market conditions, is extremely valuable as a trader. In previous publications, I mentioned that since the BTC price has been in a down trending environment for nearly 9 months we should assume that the current trading range (31 days and counting) is re-distribution unless the market conditions tell us otherwise. The BTC price is up 22% since the secondary test (ST) on July 13. Thus, the current market conditions tell us that we should consider whether the current trading range is re-accumulation instead of re-distribution. If the current trading range is re-accumulation, then the secondary test (ST) on July 13 had a spring-like effect and the subsequent rally, which broke above the trading range upper bound, broke above the value area high (VAH, purple line) and, most likely, will close above the open of the significant sell bar (shaded pink) on June 16. This is bullish! The 2 day, 4 day, and 8 day all look bullish . With regard to a long position, target 1 is $25,600 and target 2 is $29,959. Wyckoff abbreviations: automatic rally ( ARa ), preliminary support (PS), selling climax ( SC ), secondary test (ST), failed upthrust (FUT), upthrust (UT), upthrust after distribution (UTAD), last point of support ( LPS ), selling climax ( SC ), shakeout (SO), sign of strength (SOS), sign of weakness (SOW), Phase A ( Ph A), Phase B ( Ph B), Phase C ( Ph C), Phase D ( Ph D), Phase E ( Ph E). This is not financial advice. I am not your financial advisor. This is my opinion.Comment: BTC in the 1 day, 2 day, 4 day, and 8 day time frames.Comment: The same charts above but with the Bad Ass Bollinger Bands (BA BBs).Comment: Chart showing BTC, NDQ, and DXY. There is a strong positive correlation between BTC and NDQ and a strong negative correlation between BTC and DXY as well as between NDQ and DXY. At the moment, BTC and NDQ are rallying and DXY is reacting.

BTC Bottom Around $11,000 A lot of people have asked “Where is the bottom for Bitcoin?”. Of course nobody knows for sure but it is fun (and arguably important) to speculate. Here I’ve plotted the BTC price since several months prior to it’s parabolic run in fall 2020 to the present. I’ve added trend lines to smooth out the data and used linear regression channels to highlight the up trending and down trending time periods. The transitions between an up trending environment and a down trending environment are given by the blue vertical lines. The take home message is that we might see BTC bottom around $11,000 around Oct 2022. This corresponds nicely to the price observed prior to BTC’s parabolic run in fall 2000 and also corresponds quite nicely with projections made with the Phoenix Ascending indicators.

BTC to Test Support of a Wyckoff Re-Distribution Trading Range The BTC price continues to be observed in Phase B of a Wyckoff re-distribution trading range. We should consider this a re-distribution trading range (to be confirmed or to fail based on market events) rather than a re-accumulation trading range as the BTC price has been in a down trending environment for the past 6 or so months. This Wyckoff re-distribution trading range (upper bound = $31,520; lower bound = $25,340) is interesting in that the price has spent the majority of the time in the upper portion of the trading range (green shading, lower boundary of the upper portion is given by the low of the preliminary support (PS) event). In most cases, the price would test the trading range support level ($25,340) several times as it moves through the range so, in this regard, the trading range is a bit atypical. That said, it appears that BTC will be testing the trading range support level ($25,340) soon as it already has broken support at the PS event and the BTC price is observed in the lower portion of the trading range (red shading, lower boundary of the lower potion is given by the selling climax low) in what might be a shakeout/sign of weakness (SO/SOW) event. This idea is consistent with the Phoenix Ascending (PA) indicator, given in the lower panel. I expect both the red and blue lines and likely the BTC price to continue on their downward trajectory. Note the low volume over the last week compared to the climatic volume observed at the PS and selling climax ( SC ) events. This tells me two things: (1) The BTC price is able to move downward through the trading range with relative ease. If the trading range support is to hold then demand needs to be observed. (2) As the beginning and the end of Wyckoff trading ranges are typically marked by climatic level volume , BTC will likely continue within this trading range. Significant bars, which help define important areas of support and resistance , are given by the blue shading. Wyckoff abbreviations: automatic rally ( ARa ), selling climax ( SC ), secondary test (ST), upthrust (UT), preliminary support (PS), failed upthrust (FUT), last point of supply (LPSY), shakeout (SO), sign of weakness (SOW), Phase A ( Ph A), Phase B ( Ph B), Phase C ( Ph C), Phase D ( Ph D), Phase E ( Ph E). This is not financial advice. I am not your financial advisor. This is my opinion.Comment: Shown here is the BTC price in the weekly (left panel) and monthly (right panel) time frames with the Bad Ass Bollinger Bands (BA BBs, upper panel) and the PA indicator (lower panel). In the monthly time frame, I expect the red and blue lines to continue on their downward trajectory for several more months. They might reach a bottom and start turning up this fall. Interpretation of the BA BBs and PA indicators in the weekly suggest a test of the trading range support. At the moment, the indicators do not suggest a capitulation-type event in the weekly time frame.

BTC in Phase B of a Wyckoff Re-Distribution Trading Range In my previous publication, I opened a long position at what I thought at the time was a selling climax ( SC ). My analysis was incorrect, as what I thought was a SC was, in fact, a preliminary supply (PS) like event. The PS is known as the first concerted attempt to stop the down trend. Lesson learned. Nevertheless, the BTC price has entered another Wyckoff re-distribution trading range, which is to be confirmed or to fail based on market events. We are in Phase B as we’ve observed the SC and the automatic rally ( ARa ). Therefore, I’d expect the price to test the lower boundary of the trading range in the form of a secondary test (ST). This idea is consistent with the Phoenix Ascending (PA) indicator, given in the lower panel. I expect the red line to be rejected near level 50 then turn back down and for the green line to continue moving downward. The energy fall below 50 soon, indicating downward pressure on the price. Significant bars, which help define important areas of support and resistance , are given by the blue shading. Wyckoff abbreviations: automatic rally ( ARa ), selling climax ( SC ), secondary test (ST), upthrust (UT), upthrust after distribution (UDAT), preliminary supply (PS), failed upthrust (FUT), last point of supply (LPSY), shakeout (SO), sign of weakness (SOW), Phase A ( Ph A), Phase B ( Ph B), Phase C ( Ph C), Phase D ( Ph D), Phase E ( Ph E). This is not financial advice. I am not your financial advisor. This is my opinion.Comment: Looking at the BTC price in conjunction with the Bad Ass Bollinger Bands (BA BBs) and PA in higher time frames seems to confirm the re-distributional nature of the current trading range.Comment: The BTC price and the BA BBs and PA indicator in the monthly time frame.

Long BTC at Selling Climax Previously, I’ve demonstrated stepping-stone descending horizontal Wyckoff re-distribution trading ranges for BTC . Interestingly, the last 3 transitions from Wyckoff re-distribution Phase E to Phase A were similar. In all 3 cases, we observed a climatic level of volume . In all 3 cases, we observed sell bars with a large spread. The percent change in price for these Phase E/Phase A transitions were -26.84%, -21.28%, and -24.98% in Dec 2021, Jan 2022, and May 2022, respectively. In all 3 cases, we observed a selling climax ( SC ), which serves the purpose of stopping the down trend, followed by an automatic rally ( ARa ). I expect that we will observe an ARa to the first area of important resistance, which is the open of the May 9 sell bar ($33,945). I have opened a long position at $30,476 and I have a take profit target of $33,945, which is an 11.38% profit. Significant bars, which help define important areas of support and resistance , are given by the blue shading. The blue arrows point to volume spikes. Wyckoff abbreviations: automatic rally ( ARa ), selling climax ( SC ), secondary test (ST), upthrust (UT), failed upthrust (FUT), last point of supply (LPSY), shakeout (SO), sign of weakness (SOW), Phase A ( Ph A), Phase B ( Ph B), Phase C ( Ph C), Phase D ( Ph D), Phase E ( Ph E). This is not financial advice. I am not your financial advisor. This is my opinion.Comment: In this chart, I’ve superimposed a Fixed Range Volume Profile Indicator on the Bad Ass Bollinger Bands (BA BBs) to identify a second take profit target ($36,422). Also shown is the point of control, which is $38,545 at the moment. The Phoenix Ascending (PA) indicator is given in the bottom panel. Projected values for the PA indicator elements are given by the dotted lines.

BTC, NDXT, and DXY at a Crossroads Previously, I’ve demonstrated stepping-stone descending horizontal Wyckoff re-distribution trading ranges for BTC . The fact that the BTC price action broke the trading range support to the downside for a sustained period of time supports the notion of a re-distribution trading range. I opened a short position near the trading range support ($41,313). Since then, my first target of $37,400 has been hit. Based on an analysis of the Phoenix Ascending (PA) indicators (bottom panel), I expect an upthrust toward the trading range support followed by downward price movement. Short position open: $41,313 Take profit target #1: $37,400 Profit/Loss (%): 9.44 Significant bars, which help define important areas of support and resistance , are given by the blue shading. The blue arrows point to volume spikes. Wyckoff abbreviations: automatic rally ( ARa ), buying climax ( BC ), selling climax ( SC ), secondary test (ST), upthrust (UT), failed upthrust (FUT), last point of supply (LPSY), shakeout (SO), sign of weakness (SO), Phase A ( Ph A), Phase B ( Ph B), Phase C ( Ph C), Phase D ( Ph D), Phase E ( Ph E).Comment: I’ve demonstrated a strong positive correlation between the NASDAQ 100 Technology Sector (NDQ) price and the BTC price, which is not surprising given that many perceive BTC as a risk-on asset (i.e., like a tech stock). As you can appreciate from this chart, the NDQ was in strong up trending environment from May, 2021 through January, 2022. At that point, we observed a significant change in character (CHoCH) of the price environment. Specifically, we transitioned from an up trending environment to a downward sloping Wyckoff re-distribution trading range. Note that the notion that it is a Wyckoff re-distribution trading range is to be confirmed or refuted by future price action. The current price action is observed at a long-term support cluster. A NDQ rally toward the trading range resistance would be bullish for BTC and other risk-on assets. If the long-term support cluster were to be broken by a NDQ reaction then that would be bearish for BTC and other risk-on assets. Wyckoff abbreviations: automatic rally (ARa), change of character (CHoCH), failed upthrust (FUT), sign of weakness Ph B (SOW Ph B), upthrust after distribution (UTAD). The CHoCH reaction is given by the blue shaded rectangle.Comment: I’ve demonstrated a strong negative correlation between correlation between the degree of strength of the US Dollar, as indexed by the US Dollar Currency Index (DXY) price, and the BTC price. The DXY price is currently observed within a long-term resistance cluster. A bearish scenario for BTC and other risk-on assets is the possibility that the DXY price may break above this resistance cluster to all-time highs. A bullish scenario for BTC and other risk-on assets is the possibility that the DXY price may be rejected at this resistance cluster and fall toward the next logical support cluster. It appears we are, indeed, at a crossroads. Let’s see what happens and trade accordingly. This is not financial advice. I am not your financial advisor. This is my opinion.

BTC Short Near Trading Range Support This chart builds on previous ideas I’ve shared regarding the BTC price action since October, 2021. In a previous publication, I stated that we likely had observed a shakeout (SO)/sign of weakness (SOW) in potential Phase D of Wyckoff re-distribution. I presented a scenario that would confirm my idea (solid red line). According to this scenario, we would observe a last point of supply (LPSY) event followed by the price breaking the trading range support to the downside. I presented a scenario that would disconfirm my idea (solid green line). According to this scenario, we had observed a SO/ Spring event, which would be followed by a sign of strength (SOS) rally. The price data from over the last 12 days seems to confirm my idea of stepping-stone BTC Wyckoff re-distribution. Given the observation of a likely LPSY, we may open a short position near the trading range support (approximately $41,000) or at the present price. The take profit targets are at the next support levels; specifically, $37,400 (-5.4%), $33,700 (-14.4%), and $29,900 (-25.2%). The upper and lower boundaries of the trading ranges are given by the solid black lines and black dotted line. Significant bars, which help define important areas of support and resistance , are given by the blue shading. The blue arrows point to volume spikes. Wyckoff abbreviations: automatic rally ( ARa ), automatic reaction (ARe), buying climax ( BC ), secondary test (ST), upthrust (UT), failed upthrust ( FUT ), last point of supply (LPSY), shakeout (SO), sign of weakness (SO), Phase A ( Ph A), Phase B ( Ph B), Phase C ( Ph C), Phase D ( Ph D), Phase E ( Ph E). The Phoenix Ascending (PA) indicator by @WyckoffMode is given in the bottom panel. The projected path for the red relative strength index ( RSI ), blue least squared moving average (LMSA), and energy (E), are given by the red, blue, and grey dotted lines. This is not financial advice. I am not your financial advisor. This is my opinion.

Correlation Between BTC and DXY Previously, I’ve demonstrated that, oftentimes, there exists a strong positive correlation between the BTC price and the NASDAQ 100 Technology Sector ( NDXT ) price suggesting that knowledge of the BTC price allows one to predict the NDXT price with a reasonable degree of accuracy and vice versa. The purpose here is to test the notion that when the US dollar is strong, BTC is weak and vice versa. To test this notion, I plotted the BTC closing price (purple solid line) and the US Dollar Currency Index ( DXY ) closing price (black solid line) on the daily time frame. The DXY closing price was used here as an index of the degree of US dollar strength. Based on visual inspection of the upper panel of the chart, there are time periods during which there exists a strong positive correlation, time periods during there exists little to no relationship, and time period during which there exists a strong negative correlation. Given in the lower panel is the Pearson correlation coefficient value over time (red, white, and red solid line), the 95% confidence interval for the correlation coefficient (boundaries of the confidence interval is given by the solid cyan lines), the lower limit of the correlation coefficient (lower limit = -1.0, inverse relationship, white dotted line), upper limit for the correlation coefficient (upper limit = +1.0, direct relationship, white dotted line), and probability value (P value, yellow histogram) for the correlation coefficient . Note that the correlation coefficient is considered statistically significant (i.e., highly unlikely to be due to chance) when the P value is less than 0.05. When the correlation coefficient line is green, there is a statistically significant positive correlation between the BTC price and the DXY price. When the correlation coefficient line is red, there is a statistically significant negative correlation between the BTC price and the DXY price. When the correlation coefficient is white, there is no meaningful relationship between the BTC price and the DXY price. An important caveat to note: Each Pearson’s correlation coefficient is calculated on 20 days of price data. Interestingly, from Jan 1, 2022 to the present the DXY price has increased by greater than 44%. During the same time interval, the BTC price has decreased by greater than 14% The Correlation with P-Value and Confidence Interval indicator is by @balipour. This is not financial advice. I am not your financial advisor. This is my opinion.Comment: Plotted here is the DXY price in the daily time frame with the Bad Ass Bollinger Bands (BA BBs) and Phoenix Ascending (PA) indicator. The BA BBs and PA are by @WyckoffMode. Since Mar 31, 2022, we have observed a modest rally for the DXY, indicating continued increased strength of the US dollar. The DXY appears to be approaching a long-term resistance cluster. According to one scenario (blue line), which is compatible with the BA BBs and PA indicator, the DXY could continue to increase in strength and push up to the long-term resistance cluster (sooner rather than later) be rejected, and show some weakness after being rejected. According to a second scenario (green line), also compatible with the BA BBs and PA indicator, the DXY could show some weakness in the short-term, falling to the BB basis or just below the BB basis (yellow dotted line, 20 day moving average), before pushing up toward the long-term resistance cluster. The BTC price would be expected to move along a path that is approximately the inverse that of the DXY.

Correlation Between BTC and NDXT Numerous podcasts and other news sources suggest that there exists a strong positive correlation between BTC price and the price of tech stocks. To test this notion, I plotted the BTC closing price and the NASDAQ 100 Technology Sector ( NDXT ) closing price on the daily time frame. Based on visual inspection of the upper panel of the chart, there are time periods during which there exists a strong positive correlation, time periods during there exists little to no relationship, and time period during which there exists a strong negative correlation. Given in the lower panel is the Pearson correlation coefficient value over time (red, white, and red solid line), the 95% confidence interval for the correlation coefficient (boundaries of the confidence interval is given by the solid cyan lines), the lower limit of the correlation coefficient (lower limit = -1.0, white dotted line), upper limit for the correlation coefficient (upper limit = +1.0, white dotted line), and probability value (P value, yellow histogram) for the correlation coefficient . Note that the correlation coefficient is considered statistically significant (i.e., highly unlikely to be due to chance) when the P value is less than 0.05. When the correlation coefficient line is green, there is a statistically significant positive correlation between the BTC price and the NDXT price. When the correlation coefficient line is red, there is a statistically significant negative correlation between the BTC price and the NDXT price. When the correlation coefficient is white, there is no meaningful relationship between the BTC price and the NDXT price. An important caveat to note: Each Pearson’s correlation coefficient is calculated on 20 days of price data. This is not financial advice. I am not your financial advisor. This is my opinion.Comment: The Correlation with P-Value and Confidence Interval indicator is by @balipour.Comment: There are several implications of the often strong linear relationship between the BTC price and the NDXT price: (1) Knowledge of the BTC price allows you to predict the NDXT price with a reasonable degree of accuracy and vice versa. (2) The P/L from holding BTC for a specific time interval would have been similar to the P/L from holding NDXT and vice versa. (3) When trading BTC one should be mindful of what the NDXT is doing.

BTC Potential Sign of Weakness in Re-Distribution This chart builds on my previous ideas that I’ve shared regarding the BTC price since October, 2021. It appears that the BTC price has been observed in descending stepping-stone horizontal Wyckoff re-distribution trading ranges. The down trend was stopped on Jan 22, 2022 with a selling climax ( SC ) and the BTC price entered an upward sloping re-distribution trading range (to be confirmed or to fail). Since the BTC price was in a down trending environment from Nov 10, 2021 to Jan 22, 2022, our bias for the current trading range should be in favor of Wyckoff re-distribution, although we should be open to the possibility that the volume and price will demonstrate that our bias was incorrect and that the current trading range was, in fact, Wyckoff re-accumulation. With regard to the more recent price action, we likely have observed a shakeout (SO)/sign of weakness (SOW) in potential Phase D of Wyckoff re-distribution. If this is correct, then we will likely observe upward price movement back into the trading range for a last point of supply (LPSY) event followed by the price breaking the trading range support to the downside. The other possibility is that we have observed a SO/ Spring event. If this is correct, then we will observe a sign of strength (SOS) rally. The upper and lower boundaries of the trading ranges are given by the solid black dotted lines. Significant bars, which help define important areas of support and resistance , are given by the blue shading. The blue arrows point to volume spikes. Wyckoff abbreviations: automatic rally ( ARa ), automatic reaction (ARe), buying climax ( BC ), secondary test (ST), upthrust (UT), failed upthrust ( FUT ), last point of supply (LPSY), shakeout (SO), sign of weakness (SO), Phase A ( Ph A), Phase B ( Ph B), Phase C ( Ph C), Phase D ( Ph D), Phase E ( Ph E). This is not financial advice. I am not your financial advisor. This is my opinion.