We’ll take a look at the macro pattern forming for Bitcoin, we’ll look at the risks associated with this pattern and the rewards that can come from this pattern.
We’ll start with the NASDAQ and we’ll overlay Bitcoin on the NASDAQ to see how closely correlated they are. If Bitcoin could reach a million dollars now the correlation is pretty well, still spot on, of course, that was only in the last 24 hours. But as the NASDAQ heads up, so does Bitcoin. The moves themselves in percentages are obviously going to be far different. Bitcoin is moving a lot more than the NASDAQ, but in terms of ups and downs, they tend to work in sync most of the time now. If Bitcoin is to take the place of gold, we don’t want to see Bitcoin moving in sync with the NASDAQ. So, hopefully over time, this gets uncorrelated. But at the moment, this is still correlated.
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If we do see the NASDAQ fall hit some resistance at higher prices here, it fades out at its 50 percent level. So, if we take our tool drop it to the bottom – to the top and we start to see the market get rejected at these levels. Then we could see the NASDAQ drop. If the correlation is still high between Bitcoin and the NASDAQ at that time, then we could possibly expect Bitcoin to fall. So, that price point that I’m looking for on the NASDAQ is 14 500 dollars. If this low remains at the moment, it is the 18th of April and, so that just brings us up to the halfway point between the current low and the current top.
As for Bitcoin over the last 24 hours, we’ve seen it move 1.7 now. The halfway points for Bitcoin using the low on the 18th which came in on some reasonable volume, that it’s seen over the last seven days. But nothing substantially huge in comparison to the last couple of months and in particular the 24th of February which was the Russian invasion of Ukraine that was low that came in the reversal. But we did see a nice reversal pattern yesterday, so the volume for a mid-turning point in terms of the next resistance level for Bitcoin. We’re looking at 43 400, so we want a nice simple round number 44 000, but even if we did hit the 44k, there’s still a lot of overhead resistance. We had tops at 45 000-46 and then that recent top at 48 000. So, it’s not getting anywhere until Bitcoin reaches over 52 000 and consolidates above that level.
However, not to on anyone’s party here. There is, of course, a lot of all coins that can still move in. Between this and give us some sort of gains at that point in time. We’re looking at the weekly chart of Bitcoin now. We can see this sort of pattern that the market’s trending up. We’re getting some higher lows and some higher highs. The thing that I’m concerned with based on again analysis and Wyckoff analysis is the volume. So, the volume is really starting to dry up as the market creeps higher and the market pricing is also repeating itself quite a lot. So, it’s grinding up quite slowly.
You can see the price moves up comes all the way back and tests those prices. So, it’s almost as if the buyers aren’t so sure that the low is in yet, so they come they keep buying. They buy it up, then they come back and test the prices lower. It happens again and again. We’ve come all the way back obviously the nice positive here is that we’ve had higher lows but if we’re to get a move up, we really need to see a move higher and then a short pullback, before a breakout on volume.
So, that’s what we need to see to break this pattern. Some of you might see this pattern and know that it looks like a bear flag. So, if I use the entire range that would be a bit of a crazy range to me, we’re going to measure this from the breakout of the bear flag, they could give you some sort of target of 5-6-7 000. So, I don’t think that is a likely scenario for Bitcoin. Unless we got something worse than the covert scare in March of 2020. I don’t think anything like that is coming up in the next few months or a few years. That’s for sure so I would probably say that this is not a possibility, I can’t see target 1 happening as for target 2. We can take a smaller range, so just using the top here at 52 – that’s going to be an important level for the market to overcome.
So, I’m going to use 52 as the high and then the low is the current low. That’s at around 32 900, so call it 33 grand. That’s about a 19k move for nice round numbers. We’ll call it a 20 000 move to the downside. This is just going to be placed wherever that breakout is to the downside, so in case, this market runs up to the 50 point which is what we looked at on this chart. Here looking at where the market could run up to being around that 43 or 44 000, if it did run up and get rejected at that point that would look like a move on the macro timeframe or at least on the weekly chart. Where we could have a rejection bringing us to a lower high and then the market break this structure to the downside.
That’s what I’d be keeping an eye on to see. If this bear flag will play out to the downside and then look for a target so like an entry price. So, I`ve got my entry up here, then I would look for a target further down being target two and I’m just using this range here for some sort of breakout area. So, if the market does break out early may or even later may – it’s going to depend on where that is. But, just for argument’s sake, we’ll leave it around here well that target side comes down to around 20 000 and I think that’s sounding a little bit more realistic. But also unrealistic for the permabulls where they don’t think that these lows will get broken, but the bears probably well.
The permabears probably think that we’ll go somewhere around these current levels or the previous levels of 2020 being around 8 000 to 12 000 dollars. Those numbers are often thrown around there, especially by permabears. So, permanent bears – that’s a sort of target that would probably shock the bears, it won’t reach that level but this level at 20 grand will also shock the permabulls. So, I’m just looking for targets in terms of market sentiment where it could shock the market. In both directions and then pull up short because it won’t get to the extreme figure that the permabears think will happen. but it’ll also shock the bulls because they never thought that these lows would be broken because of all the stories that we hear Elon Musk was buying Bitcoin at 30. Grand Michael Sailor buys Bitcoin at 30 grand that doesn’t mean anything. It doesn’t mean that the market will hold up at those levels just because people have bought the price at that level before. So that’s target 2 around that 20 grand now. I’ve also got a 50 percent level. So that is where I don’t get greedy in a trade. We often look at 50 that’s pretty much what I base a lot of my trading on looking at these 50 levels because they happen so often in the market. If the 50 percent level has to come up well then I can use this range which is the 52 grand to 33 grand and then split that in half and use that from the entry point so wherever that entry point may be along with this uptrend so if that channel happened to come out at 40 grand or 38 grand, for example, then 50 percent.
The move down was nine and a half thousand dollars being that it was a 19 grand move let’s use 10 grand as a round number so the entry is at 38 and then we could expect a potential target of around 28 000 so none of this has to come true it doesn’t have to happen exactly but in terms of a trade that’s what I’d be looking for the Bitcoin breakdown of a bear flag which, unfortunately, this is.
What it’s currently working out to be at the moment? So, target 2 is somewhere around that sort of mid-20s to high 20 thousand dollars earlier I spoke briefly about how I could be wrong on this and what I would look for ii. If the 50-level broke which is around 44 000, we got a higher low forming and then the market moved its way up and took out the 48 to 50 000 which of course is going to be huge exuberance for the rest of the market. We’ve moved to a new high the 50 000 psychological level has been met as well so that obviously plays into the market psychology and that bullish sentiment that just spins a flurry on YouTube and on Twitter and provided it continues up and breaks the critical level of 52 000. Then I would say that this has been invalidated and we were bullish all along, but until that happens, I don’t believe that we have any sort of resolution just yet for the macro picture. These scenarios can be a little confusing if you’re just starting in the market and you’re unsure of how to trade or how much energy you want to put into the market.
When it comes to actively look after your investments, this is what I do on a full-time basis. You’ve got to understand what’s going on to the downside and to the upside how you would play both directions? What are the probabilities of the market going down in a pattern? That looks like this and what are the probabilities of the market going up what would happen if this pattern failed that’s the sort of stuff. We have targets – one and two and then we can break down these targets to 50% levels which is something that works. So, often in the market regardless of whether it is time or if it is price now of course we can start to see some of these other cryptos having a little bit of a pop-off at the moment.
But let’s recap the targets: target one somewhere crazy. I don’t think target one is going to happen. I see this is like a multiple-choice exam that we have to play here no one knows. What the answer is to this test? We have to start to cross some of these multiple choices off and then go with that one that might happen and prepare for that answer target one. I doubt it five six seven eight thousand dollars. I think there’ll be so many people buying up way before then target two it’s a possibility somewhere around that 20 000 dollars level those high teens to low 20 000 dollar levels.
Even if it might just be a wick and a quick flash crash to those levels before it bounces back quickly that’s always a possibility something that could get me on the side without being too greedy. I’ll look for something around that fifty percent level of the target two. So, the target two for a round number is about twenty thousand dollars move from the point that the market breaks this structure so we’re using 38 grand as a round number and that would be uh ten thousand dollars down which brings us out to about 82 000 dollars which conveniently lines up with all these other lows that have come into the market and slightly take them out you can see the low that happened January 2021 was 28 800. Then in June 2021, we had 28 900, so I think if those levels were just touched maybe 25 26 28 000. I reckon that would be a great place to flush out all of the stops that are sitting behind these levels. So that we can reset the market and move up again in terms of timing. It’s going to be difficult to find out when that exactly is.
But in terms of the signs we could see if that starts to play out in the market may be coming up and testing some of these levels it could eventually just break down from where it is but I think if this pattern began to break down then we would definitely be coming back to test some of these prices around the mid-thirty thousand dollar levels and if it was looking weak as it tested those levels then we’re probably heading back down to find wherever those next massive whale buys are but for now. We don’t see any huge amounts of whale buying activity going on of course there are whales buying they’re buying and selling they’re trading the market as we looked at uh in yesterday’s video because any sort of small move here of three or five percent, if you’re leveraged up on a trading platform even if it’s only 10x three or five percent, turns out to be 30 or 50 percent. If you’re trading at 100x with very tight stops of course multiply this by 100 300 percent 500 percent and so that’s probably why whales can continue to buy
This article is a transcription of a video made by Andy Bitcoinsensus
Original video: https://youtu.be/ugpv9-CLJhQ