Is This A Good Time To Be Long On Bitcoin? 

Bitcoin is holding strong above the $9k level but a lot of traders that were previously bearish are now wondering what is going on. Some are doubting themselves and asking if the bulls had been right all along and they made a mistake. Well, we have been talking about a potential bull trap in Bitcoin for a long time in our video analyses. The fact that so many people are buying into the “halving bull run” narrative gave us more reason to think that the market makers and the whales would end up setting a trap to lure such traders in. The best way to do that is to print long green candles on the Bitcoin chart. Never mind the follow through because most retail bulls just want to see one or two long green candles to FOMO into a buy position. 

To set the record straight and to show some analysts and traders the mirror, we have sketched multiple trend lines on the BTC/USD chart to demonstrate how similar descending channels were “broken” in the past which led to aggressive downtrends soon after. The problem is not a lot of people with loud voices being wrong. Most responsible traders don’t listen to them anyway. The problem is when a respected trader who is wrong let’s say 80% of the time ends up telling their followers that a downtrend has been broken and the price is now in a new bullish cycle. The way the 80-20 rule works is that if people believe 80% of the right things you say, you can have them believe 20% of the wrong things that you say. 

For those in the Crypto Daily community that follow and read our analyses on a daily basis, the answer to this is quite simple and that is to be a contrarian and do the opposite of what the herd is doing. Forget about bullish or bearish for a while and think about what the herd is thinking right now. Can you ignore the fact that the majority of the market is bullish before the next halving? Can you ignore that 67% of all trades on the big three exchanges (Bitfinex, Bitmex and Binance) are long and only 33% are short? This coupled with the fact that Bitcoin dominance (BTC.D) may be just about to break out of an ascending triangle and begin a new uptrend gives us no reason to be bullish on the market at this point. Both the S&P 500 (SPX) and WTI Crude Oil (USOIL) are at key decision points and whichever way they swing, the cryptocurrency market will follow but it is clear that on a longer time frame, both have to revert to the mean and thus any short-term noise would merely delay the inevitable.