Bitcoin (BTC) is very close to forming a golden cross. To most retail traders, this golden cross is an eventuality that has to happen sooner or later. However, to the whales it is a perfect opportunity to create a bull trap. Yes, this has happened before many a time but there will always be people who fall for it. Human psychology never changes and traders make the same mistakes over and over again which is why it is so easy for these whales and market makers to take their money. If we look at the daily chart for BTC/USD, just a quick glance is enough to tell us that there is a serious weakness in the price action and the pumps we have seen are not natural. It is as if somebody is trying too hard to create buying interest in the market.
At this point there are two types of people who are bullish on Bitcoin (BTC). The first type is those that think the price is going to pierce through the $5,800-$6,000 resistance zone and breakout towards $8,000. I have to say, the whales have done a really good job at convincing the masses that the price could rally towards $8,000 this soon. After recent developments, I would be very surprised to see Bitcoin (BTC) reaching a price of $8,000 even by the end of this year. This is because it is quite clear now that the current market cycle is in fact a lot longer than the previous one. The next one will be even longer than the current cycle which means it will be a long time before we see the price reach $8,000. There are a lot of whales just waiting to dump their Bitcoin (BTC) at $5,800-$6,000.
The second type of people bullish on BTC/USD at the moment is those that think the price has to test the $5,800-$6,000 zone before it goes down. In fact, the vast majority of traders are waiting for this zone to either close their longs or open shorts. The whales love when traders are in a situation like this because it gives them the opportunity to play both sides. Now, if the price were to shoot straight towards $5,800-$6,000, the bulls would win and the whales would only have to prey on the bears that open their shorts around that point. The whales would pump the price a bit higher, shake them out and continue downwards. However, they would not be able to prey on the bulls under this scenario which is why it is not likely to happen.
In every battle, if you know yourself and know your enemy, you do not have to fear the results of a thousand battles. Understanding the whales’ game plan helps us better position ourselves against difficult situations. The weekly chart for BTCUSDShorts shows that the bears have a lot of room to push. In fact, they are just getting started. If BTCUSDShorts ends up breaking and closing above the 50 week EMA, it will be game over for the bulls. This is why the most likely scenario is that the whales would shakeout the bulls first, then they would take the price to the resistance zone at $5,800-$6,000 and shake out the bears there and then continue downwards towards $1,800 or lower till the bottom is reached.