Bitcoin 5 Consecutive Bear Weekly Bars — Transcript

Full transcript

1. 0:02[music]
2. 0:07[music]
3. 0:10Hello everyone and welcome back to this
4. 0:13week's Bitcoin price action analysis. My
5. 0:16name is Joseph Capo and I am a trader
6. 0:18and an alalfto for the Brooks trading
7. 0:20course website. This week we bring you
8. 0:23back the weekly and daily charts of
9. 0:25Bitcoin. To begin with, this is the
10. 0:28weekly chart of Bitcoin and the main
11. 0:31thesis that we are discussing on this
12. 0:33channel for many weeks. It is the
13. 0:35possible major trend reversal up setup.
14. 0:39We think that this is what's moving the
15. 0:41market right now. The major trend
16. 0:43reversal comes after or it needs first a
17. 0:46bare trend, then a bull breakout of the
18. 0:50upper trend line of the bare trend, a
19. 0:53retest down to the lows or the extreme
20. 0:56of the bare trend, and finally an always
21. 0:59in long flip, a confirmed bull reversal
22. 1:03after all these sequence of things. And
23. 1:06the market expects after such a thing, a
24. 1:08couple of legs up, one leg up. This can
25. 1:11be the small second leg sideways to up.
26. 1:14And what follow it after this small
27. 1:17second leg sideways to up are five
28. 1:21consecutive small bear bars. These bear
29. 1:25bars are not great looking. They have a
30. 1:27bare bodies but there are tails. Still
31. 1:30the bears got five consecutive bear.
32. 1:34[clears throat] The bulls see that this
33. 1:37can become just a bull flag. The market
34. 1:39didn't break any structure that makes
35. 1:43things think the bulls that the market
36. 1:45is now going to fully reverse down the
37. 1:48trend. But they think that this is a leg
38. 1:52one pullback and leg two and they will
39. 1:55achieve their main target since the
40. 1:58market just was testing down there which
41. 2:01was to test a $100,000 level. Why?
42. 2:06because the $100,000
43. 2:09level, it is the most important price
44. 2:12level on this chart. And we believe we
45. 2:14have been defending that on the monthly
46. 2:17chart, this is probably a trading range
47. 2:20from $125,000
48. 2:22down to the 50 or $60,000.
49. 2:26And that the market in a trading ranges
50. 2:29what it does it it is gravitate towards
51. 2:32the midpoint. And we think that the
52. 2:34$100,000 level it is that midpoint or
53. 2:38around that midpoint. So anything
54. 2:40between $90,000 and $100,000 it can be
55. 2:45considered that mean reversion point.
56. 2:48However, after five consecutive bare
57. 2:51bars, bulls need a bull reversal very
58. 2:54soon because if bears just break down
59. 2:57this double bottom or just create a
60. 3:01strong momentum on the downside, the
61. 3:03bullish structure will just disappear
62. 3:06and hence this bull thesis will be
63. 3:10erased. The bears they think that we are
64. 3:13already in a trading range that this all
65. 3:16it it is a trading range and now what
66. 3:19they see it is a first reversal down
67. 3:22from a failed bull breakout of that
68. 3:26trading range. Bears were able to close
69. 3:30gaps. So for the bulls are negative
70. 3:32gaps. And now the bears they think that
71. 3:36the market will create another leg down
72. 3:39towards the apex of the trading range or
73. 3:43testing or closing the gap between the
74. 3:46high of this bear bar right and the
75. 3:49current price because this is a gap and
76. 3:51in trading ranges gaps tend to close. So
77. 3:55that's what the bears want. Now it is
78. 3:58good time to enter on the bare side if
79. 4:01the market does not provide a strength
80. 4:04and that's usually comes creating micro
81. 4:07gaps or consecutive strong bars or a
82. 4:10surprise bars then it is usually better
83. 4:13to wait for pullback and then sell for
84. 4:16example a low one setup or bulls for
85. 4:20example reverse up but they fail and the
86. 4:22market creates another bear bar and then
87. 4:25the bears believe that the transition
88. 4:27between one leg down towards the closure
89. 4:29of the second uh the closure of these
90. 4:32gaps while the market from the second
91. 4:34leg started. So I if I were a bear I
92. 4:37would wait for a bare reversal after the
93. 4:39pullback because these tails all these
94. 4:42tails tells me that there are bulls
95. 4:44around there and I don't think that when
96. 4:47the market does not provide urgency it
97. 4:50is a good time to just sell for any
98. 4:53reason. Before finishing the weekly
99. 4:56chart analysis I would like to remember
100. 4:59this sentiment index. This indicator is
101. 5:02built based on several factors. But what
102. 5:05we deduce is that there are many traders
103. 5:08that that are very bearish that are
104. 5:10positioners on the bare side and
105. 5:13actually there is no technical reason to
106. 5:16believe that the market is in extreme
107. 5:18fear normally after such a strong
108. 5:21bearishness here. So at some point
109. 5:23around here or after this bare breakout
110. 5:26three consecutive strong breakouts more
111. 5:28than 10 or $15,000 in a in a couple of
112. 5:31weeks lost that creates fair. However,
113. 5:35something like that doesn't looks as
114. 5:38strong where the bullish structures are
115. 5:41not clearly erased then it is suspicious
116. 5:46and many times what happens it is that
117. 5:49if now there is a bull reversal that is
118. 5:51strong that means that there will be
119. 5:54effectively trapped bears that bears or
120. 5:58traders that have been positioned on the
121. 6:00bear side for several weeks and now they
122. 6:03will be on a a really bad trade and that
123. 6:07creates what is called what is known as
124. 6:10a short squeeze. Now it doesn't mean
125. 6:13that this has to happen but I think that
126. 6:15it's worth and fun to make the note.
127. 6:19There are many traders that trade the
128. 6:21markets in a serious manner that they
129. 6:24pay attention to those kind of stuff and
130. 6:27they like to know where the mass is
131. 6:29positioned and depending on what the
132. 6:31technicals how the technicals follow
133. 6:34then they know that one side of the
134. 6:37market is forced to do the opposite
135. 6:39movement and that creates imbalances
136. 6:42which is ultimately what we trade here.
137. 6:45And now let's look at the daily chart of
138. 6:47Bitcoin. The daily chart looks like a
139. 6:50trading range. Actually, the market has
140. 6:53created a bare channel or a wedge
141. 6:55bottom. And now we are trading at the
142. 6:57trading range bottom third or what
143. 7:00presumably it is the bottom third of a
144. 7:02trading range. Right? The bulls think
145. 7:05that this is a wedge bottom, pullback
146. 7:07two, pullback three, pullback four,
147. 7:09however you want to call it. The point
148. 7:11is that we are at the lows of a possible
149. 7:14bare channel and that usually becomes a
150. 7:17reversal. Moreover, they are testing the
151. 7:21lows of the previous range where the
152. 7:23market actually found support and
153. 7:26created this strong spike. So in the
154. 7:30past there were strong buyers around the
155. 7:32current area.
156. 7:35So what the bulls want it is to actually
157. 7:39test higher during this bear trend
158. 7:43during this um bear channel the market
159. 7:46created um or as we always look the body
160. 7:49gaps and in this case this body gap here
161. 7:52after this breakdown was tested but it
162. 7:56wasn't closed. So so it is a positive
163. 7:59gap for the bears. However, then the
164. 8:01market created another bare leg and
165. 8:04another small bare leg and those gaps
166. 8:08are closed by where closed by this bull
167. 8:12bar. Therefore, that usually limits the
168. 8:15downside. It doesn't mean that it is
169. 8:18impossible that the market will just
170. 8:20break down. However, it tells us that
171. 8:23the market probably or that there are
172. 8:26buyers around here and there will be
173. 8:29buyers around there and that usually
174. 8:32limits the downside. Moreover, the bulls
175. 8:35see this moving average which is the 200
176. 8:39day moving average and they think that
177. 8:42this is a support in the market after a
178. 8:45strong breakout of it. Spent a long time
179. 8:48above it. So it is hard to actually
180. 8:50break down this uh moving average. If I
181. 8:54were a bear here, I would not look to
182. 8:56sell neither because I see or I think
183. 8:59that the market is in a trading range. I
184. 9:02if I were a bear, I will wait for
185. 9:05actually a bare breakout of this bare
186. 9:08channel which is low probability. A bare
187. 9:10breakout of this 200 day moving average
188. 9:15and then uh look to sell. However, here
189. 9:19it is more for reversal trader. A
190. 9:21trading range, it is an environment for
191. 9:23reversal traders and traders in a
192. 9:25trading range want to buy low and sell
193. 9:28high. Here the bears, if the market just
194. 9:31reverses up and does a couple of like
195. 9:33slop, which is what I think bulls are
196. 9:35looking for. There is this positive gap
197. 9:38on the bare side and therefore this is
198. 9:41the first resistance that bulls will
199. 9:44encounter. the $80,000 big round number
200. 9:47plus the apex of of all the range plus
201. 9:51this body gap this positive gap where
202. 9:54institutions defended in a previous
203. 9:56couple of of times. So bears will look
204. 9:59to sell actually around those highs
205. 10:03unless of course bulls look too strong
206. 10:06which is another possibility based upon
207. 10:09the possible bull flag we have just
208. 10:11discussed on a weekly chart. Everything
209. 10:14I have been talking during this
210. 10:16analysis, it is on your reach if you
211. 10:19learn the Brooks price action
212. 10:21methodology. The Brooks Trading Course,
213. 10:23it is the best resource to become a
214. 10:26consistently profitable trader out there
215. 10:29in the internet. Visit the site brooks
216. 10:31trading course.com and you will find a
217. 10:34lot of useful free resources on the
218. 10:37learn to trade tab and the blog. You can
219. 10:40find the link in the description of this
220. 10:42video if you want to know more. And this
221. 10:45is everything I've got for you today.
222. 10:48Thank you so much for watching this
223. 10:50video. I will read you in the comments
224. 10:53and see you next week.
225. 11:07[music]