Bitcoin (BTC) has slowed down after rallying hard the past few days. Most retail bears have already opened short positions while others are still looking for more favorable entry points. The price is clearly overbought and the resistance zone at $5,800-$6,000 is clearly not one to be breached that easy. However, that has not stopped most retail bulls from letting the possibility of a golden cross eclipse all else. The 50 day EMA is now incredibly close to the 200 day EMA and we could see the long anticipated golden cross result in a strong move to the upside that will unnerve most bears. It is going to be very interesting to see how BTC/USD trades around $5,800 because that is where most of the retail bears have their stops at.
Soon as those stops are hit, we could see the price spike up but considering that it is a strong resistance zone where a lot of sellers are lined up to sell; we could see the effect of a short squeeze be reduced by a massive sell-off. It will unnerve the bears nonetheless and we might see a sharp decline in the number of margined shorts. We are not talking about the bulls here because they are obviously wrong and they will get punished one way or the other. This is because they are wrong about the timing and wrong about the direction whereas most of the bears are only wrong about the timing. Retail bears are right about the direction because the price will eventually fall but unfortunately without most of them onboard. The perfect play for the whales here is to shakeout the bears, trap the bulls and then pull the Tether plugs to let the price fall.
All those people who are very bullish on Bitcoin (BTC) right now and believe that the price has bottomed need to ask themselves on question before all else. Why does the price move up in pumps and decline very systemically? Why does it not rise systemically? Well, let me tell you why. The selling interest is real but the buying interest is not. Most of the retail traders that you see commenting on Twitter about a rally to the moon are insignificant compared to big players who call the shots. See, the professionals understand that most of the trading that is going on right now is controlled to say the least.
Any professional trader who has actually made money in any market would tell you that the best way to make money in any market is to follow the trend. The trend is your friend. This is why most professional traders are against trading breakouts and sudden moves, but if you look around that is all people are doing in this market. We see a few candles of consolidation followed by a big move to the upside or the downside. If we look at the daily chart for BTCUSDShorts, we can see that the number of margined shorts is expected to decline in the near future. This decline will coincide with a sudden rise in the price of Bitcoin (BTC). This rise will be short lived and those that can adhere to Plato’s four cardinal virtues i.e. wisdom, morality, courage and temperance stand to gain a lot during the months that follow.