Bitcoin (BTC) At Do Or Die, Everything Hinges On The Price Breaking Past $9.6k

Bitcoin (BTC) has run into resistance at the 38.2% fib retracement level that corresponds to a price level of $9,588. If the price fails to break effectively past this level to shoot higher and begin an uptrend, it risks to lose everything during the next decline which could drag it down to the 61.8% fib retracement level at $6.2k and eventually lower than that. So, it all hinges on what BTC/USD is going to do at this key decision point. The price is still struggling to break past the strong resistance zone which used to be an important market structure. It is very unlikely for Bitcoin (BTC) to break past this zone. 

However, it is not going to stop retail bulls from going long. Every time we see abrupt bullishness like this, we see a lot of retail bulls get overly excited. This is because most of them are still so sure about the price going to the moon before the next halving. So, no matter what happens next to the price, even if it falls below the 200-day moving average, many of such traders would always come up with reasons to stay in the trade. If the technicals don’t work, they come up with fundamental reasons like “there is only 21 million Bitcoin” or “no way people are going to let the price go down that low”. We have seen this kind of thinking in the market before when it was trading around $6k and we also know how it ended. 

The daily chart for BTCUSDLongs/BTCUSDShorts shows us that we now have a decline down to a key support level. This means that the number of longs could start to stack up against shorts to potentially form a double top. This does not have to mean an increase in the number of longs; it could be a decrease in the number of shorts which makes sense because most retail bears watching these recent pumps would now be thinking about closing their shorts. 

The market makers always end up preying on both retail bulls and the bears but in different ways. The interesting part is that while they may be bullish or bearish, they are essentially the same in what influences their thoughts and decisions in most ways. Now that Bitcoin (BTC) is close to the 38.2% fib retracement level again, many retail bears would be quite scared that the market could flip bullish and go against them. As a matter of fact, we saw 12 million shorts being liquidated on Bitmex in the past six hours. So, it appears that the market will end up doing the inevitable but before it does that, it is going to shake out as many retail bears as possible and trap in as many retail bulls as possible.