Bitcoin Price Analysis: Explaining the Manipulation of the Price and Potential Long-Term Targets

Picture Credit: CoinTelegraph

Disclaimer: Nothing in this article is financial advice.

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Bitcoin Price Analysis 6–26–2018

Hey Everyone!

I know that it has been a bit of time since the last analysis (was dealing with some consistent migraines among other business), but I’m back and we’re about to get back into it.

$6.3k is the resistance point here.

From what I’ve seen and tracked on Bitcoin, $6,300 is not a particularly strong resistance.

I noted on Twitter (twitter.com/cryptomedicated) as well as the Telegram (t.me/CoinEducation) that this pump looked highly manipulated and that shorts were more than likely being squeezed by some bigger players in the game.

“What is a Short Squeeze CryptoMedication?”

Great question. Glad you asked.

Thank you to our friends over at Investopedia; Source: https://www.investopedia.com/terms/s/shortsqueeze.asp

So, What Are You Trying to Say?

Another great question.

Basically, what I’m saying is that the pump that we experienced recently was purposefully manufactured by whales in the BTC markets for the sole purpose of creating mass liquidations among those that are holding ‘short’ positions in futures markets such as BitMex or Bitfinex.

When these shorts are liquidated or their margins begin to become compromised, they “panic sell” or close their short positions, and then they open up long positions in order to cover their losses.

This, in addition to the general FOMO in the market is what leads to a rapid price increase.

Check This Out:

+8.24% gain in just two hours.

The above picture should strike everyone as very odd.

We know for a fact that the average daily volatility of Bitcoin is substantially less than 8.24%. So, for the price to bump up that much in just 2-hours without there being any fundamental reason is our key indicator that this is all based in technicals.

Yes, manipulation is part of ‘technicals’. However, it’s not just manipulation. Those with the leverage and latitude to buy up enough orders to move the market upward are just playing the game, in my opinion (legal or illegal — that’s for the courts to decide).

The technical aspect of this is the fact that we know that shorts will get liquidated, and that this almost always results in them buying long in order to cover their positions.

The phenomenon of FOMO is also well-documented.

Whales that hold long positions in these situations can profit as the price gets jammed upward.

This works well for them both ways too because, there is so little buy volume in the markets, that they are able to force the price down with ease by overwhelming the amount of buy orders in the markets.

This causes the price to slide down rather quickly, resulting in long positions being liquidated (after they were set up by the short-sellers that were liquidated earlier — bad luck!), and also it causes folks in the market to panic sell.

And, as we have covered in numerous articles in the past, when dealing with a bear market, the rate of selling will always exceed the rate of buying in terms of volume.

Thus, Bitcoin holders or those in long positions should be very cautious at this moment in time (this is not financial advice).

For those that are able to trade on Mex or other platforms, a short position is probably favorable.

I advocated this in the chat from the point that Bitcoin was at $6.2k, and this would be a winning position as of this very moment. If you join the Discord chat I have, we will be lending expertise on Mex.

As I Type This the Price is Falling Through the Floor

We shouldn’t really be surprised here, though — it was bound to happen.

But, this is what has been going on for weeks at this point:

Notice anything strange here?

So, Where Do You See the Price Going to CryptoMedication?

Great question.

I believe that $5.8k will be a great resting spot, but if not, there is strong support at the $5.5k mark on a LOT of different charts via many different indicators.

Let’s Outline Some of These

Above is the EMA-100 on the weekly. It’s lined up right at the $5.5k valuation. Should be a support because that’s what EMA indicators do.
Here’s $5.3-$5.4k out of the EMA-25 on the monthly chart.

Once again, these are just my thoughts and opinions — feel free to do with them as you wish.

I believe that $5.5k seems to be an imminent possibility.

Within the longer-term, however, my prediction is just a bit more bearish.

Now, Let’s Look at the Longer-Term View Here

Inverted Cup-and-Handle Pattern

https://platform.twitter.com/widgets.js

Take a visit to this tweet that I put up above a couple of days ago.

I decided to just re-post the tweet because that’s a more efficient use of time, and it still conveys what one of the reasons why I believe that $4.4k could be an imminent possibility.

To summarize, I was just mentioning the fact that there was an inverted cup-and-handle pattern on the daily chart for Bitcoin. This pattern has been confirmed and outlined by Thomas Bulkowski.

By using the calculations associated with cup and handle, a target of $4.4k was curated for me.

1-Week Fibonnaci Levels

That 76.8% retracement level stands at $4.2k

I know some folks aren’t fans of Fib levels, but I find them to be very reliable, in general.

According to the 1-Week Fibonnaci Chart, $4.2k should be the next bounce opportunity for the price before it circles up.

1-Day Fibonnaci Levels

Overall Picture

So, this is the $6.1k bottom that has occurred per the Descending Triangle formation.

As you can see in the above picture, the price has not all the way broken down below the $6.1k mark.

There are wicks that are below it, but I generally like to see an entire candle form below a certain point before saying that a breakout southward is “final”.

Thus, it can be said that the bulls are still somewhat holding their position.

Conclusion

Notice, that I am looking at the long-term here. Not movements that will occur within the next day or so.

The market is so manipulated at this point, that I’m not sure that I would be able to reliably make such predictions. This does not mean that technical analysis doesn’t work. It just means that I don’t believe that my knowledge or comprehension of the markets/technical analysis is sufficient enough to pinpoint when random spikes will occur.

As I work, grow and learn, hopefully this will not be the case.

I find it more fruitful to ascertain the general direction of things as well.

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