The markets are bleeding to death. Ether (ETH) fell from $ 500 to $ 300 in a few days People are screaming that the DeFi bubble has already burstand they cry because the value of their favorite coin “[inserta aquí el nombre del alimento]”It fell after a month-old Twitter account took 38,000 ETH from investors.
According to Coinmarketcap, Bitcoin’s market cap is currently $ 188,310,118,530.
Yes, it’s just another week for cryptos, but did anyone else notice? Tron (TRX) pumped in the middle?
It may be a coincidence, however The last time this went so fast, the entire crypto market bled to death in the long, cold crypto winter.
Daily snapshot of the crypto market, September 4th. Source: Coin360.com
The top of the “Bart Simpson” pattern of Bitcoin price
4-hour chart for the BTC / USD pair. Source: TradingView
Bitcoin has lost 21% of its dollar value after falling from $ 12,500 to below $ 10,000 in just two weeks Leaving the popular “beard” pattern infront of us.
But when the leading digital cryptocurrency by market capitalization Take such a dramatic step dragging (mostly) all other assets with it.
The summit this particular chapter in history Bitcoin’s price was roughly $ 12,500, and many now wonder where the minimum could be. So in this week’s analysis I will examine three possible scenarios for how the low can be identified.
The CME gap
BTC1! 4-hour CME chart. Source: TradingView
Most experienced bitcoin traders are aware of the CME gap. Let me explain this to those who have not been exposed to this issue before. Bitcoin is an asset that can be traded around the clock. However, the CME is only open 23 hours a day, starting on Sunday afternoon at 5:00 p.m. (local time) and ending at 4:00 p.m. (CT) on Friday afternoon.
This means that there are windows in which Gaps can occur, typically this happen on the weekend when the market closes on a Friday and opens again on a Sunday afternoon. However, Traders can continue trading the asset around the clock Use what the CME refers to on its website as follows:
“Rule 526 and EFRPs (Exchange for Related Position) can be traded / executed 24 hours a day, 7 days a week under Rule 538 and must be submitted for clearing during the relevant clearing session”.
This means that Orders can still be placed when the market closes on chartswhich in turn means that Orders cannot be fulfilled and this is where the loophole comes in.
The last violation occurred on August 13th. It was on a Thursday. When CME closed for an hour while the price of Bitcoin was $ 11,715, it reopened at a price of $ 11,765. This $ 50 train created the void. So If Bitcoin climbed to $ 12,635 on the CME chart, there may be $ 11,715 unhedged orders left.
Since the price exceeded the gap on August 19, 2020, the gap is considered “full”. and it can only be assumed that the orders which lagged behind at this level were then carried out.
However, the price of Bitcoin continued to drop, and we had one new local low of $ 9.905 on the CME chart, now only $ 240 after closing a gap on July 24th.
It gets pretty cloudy here. The range of the July 24 gap is between $ 9,665 and $ 9,925, which begs the question of whether the gap has yet to be closed. Or when the gap has been partially filled.
When the wick entered the area of the void, it did not reach $ 9,965, so it did not fully close the void. Does this mean there are still orders of $ 9,665 to be fulfilled?
We don’t know, and this leads some speculators to believe that the void has been filled and another believes it has yet to be filled.
Weekly Fibonacci displays $ 7,000 levels in support
Weekly chart for the BTC / USD pair. Source: TradingView
Leave the CME magic aside Tech traders are already looking for $ 7,000 support areas. Analyst @oficialmentekeith (* ahem * that’s me by the way) tweeted on September 4th:
“Losing the $ 0.618 level of $ 7033 for the week could fulfill my dream of having nothing.”
Soon after, the same levels were picked up by well-known trader Scott Melker (@scottmelker) who said::
“Note: From here, a retreat to the $ 7,000 level would still be considered “healthy”.to hit a 61.8% gold pocket retracement before making new highs. That would be really “normal” after moving from the lows in March. It would scare everyone. “
While the prospect of hitting the Fibonacci level of 0.618 could scare many people, older Bitcoin veterans like @ Davincij15 Crypto were quick to reassure Twitter that this is all part of the game. He showed as:
“Nine and a half years ago …
… I bought #bitcoin for $ 1 and bought up to $ 32, and then I saw it go down to $ 2! I also saw it jump between $ 5 and $ 7 for 2 years.
I still saved, I still shopped, I was still here, I was still strong! “
A reminder to all of us It will not be easy not to have or trade BitcoinSo far, however, it has rarely been advisable to bet against Bitcoin. Now We have two potential lows in sight: $ 9,665 or about $ 7,100.
However, There is a third indicator less conventional, that might have the answer …
TRX / ETH chart for one week. Source: TradingView
Let’s talk about Tron for a second. My last 10x bull market trade in 2017 was in early 2018, with TRX.
We all know what happened after January 2018. The crypto bear market took over and altcoins were nearing zero. But what is interesting about Tron, and especially its graphic history, is that Every time Tron hits a candle with a wick big enough to be the same size as the candle itself, strange things generally happen in the crypto room.
This is not immediately apparent in the TRX / USDT pair charts, as Tron was launched as an ETH pair. So If you look at the TRX / ETH chart for the week you will see a clearer pattern than the Bart Simpson we see on today’s Bitcoin price chart..
When we first saw this type of long tailed bomb candle, the bear market began. The second time happened the week of January 7, 2019, followed by a long-tail discharge candle on February 4, 2019 – it was exactly during this period that Bitcoin found its low near USD 3,300..
So here we are again The weekly August 30 candle is a long tailed green candle in Tron and all markets are they can fall apart. Maybe, just maybe, the minimum will be signaled when Tron prints another candle with a wick that matches his body size again.
The bearish scenario for Bitcoin
If the price of Bitcoin doesn’t hold the CME gap support at $ 9,665, I’ll be looking for the support in that weekly fibonacci values. These are on the following levels: the $ 0.382 to $ 9,190, followed by the Fibonacci from $ 0.5 to $ 8,168, with a perfectly safe correction level of 0.618 near $ 7,146.
The loss of 0.618 would be a sign that we had our bull market.Now is the time to look out for the Trondicator.
The bullish scenario for Bitcoin
The effect of the CME gap is very real. I saw an immediate price correction firsthand after the CME void was closed. Therefore, Since this loophole has been partially closed, we may have already seen the minimum. The first bullish sign would be to close above 0.236, which is close to $ 10.454. If the price of Bitcoin maintains this level, I expect the bull market to resume.
The views and opinions expressed here are solely those of @offiziellkeith They do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risks. You should do your own research when making a decision.
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