I Shorted Bitcoin at $28k, but Why? — 2x Profit Setup
I’m Still Bullish But Reasons | Fed | Money Flow | Patterns | Setup
Everyone is excited about bitcoin and what will happen next. Several similar incidents are taking place in the market, which is causing volatility in the market. In this article, we will discuss how we can understand this volatile market and prepare our trades. Together with this, I will share what is going to happen next in bitcoin.
2/3 Cut
When the Federal Reserve started quantitative tightening, all markets have fallen. The whole banking industry was put under strain and pulled towards insolvency as a result of the FED’s action. The United States has started printing money in order to relieve this pressure, reversing 2/3 of the quantitative tightening that was implemented in just two weeks.
Money Move
Due to the printing of this money, the investors get into a little panic because the more the new money is printed, the more the investor’s money will be devalued. To avoid this devaluation, they invest in gold, cryptocurrency, and commodities.
Gold vs BTC
People’s interest in gold is decreasing as a result of bitcoin. Additionally, because bitcoin has seen more volatility than gold, they have become crypto fans. All of the major banks, governments, and investment firms are relying on gold because it is the best choice for them.
Have you thought about who would benefit the most when the new money market arises? The existing banking system will undoubtedly benefit because everything is being done for them, but those markets that are not controlled by anybody will benefit the most. This indicates that the flow of money will increase, similar to decentralized cryptocurrencies.
With this money flow, the bullishness in the crypto market will continue, and the price of cryptos will rise even more. If you believe that crypto is on the upswing, there is no need to be afraid.
Let’s Talk about a Few Troubling Things Before We Begin.
- Coinbase has been charged with fraud by the SEC. The SEC has issued a warning letter to Coinbase, accusing it of breaching the Securities Law.
- The SEC has filed a formal complaint against Tron founder Justin Sun. Fake volume is produced in all of their coins to give the impression that their blockchain is extremely busy.
- The net flow of bitcoin exchanges is negative, totaling $67 million.
- The Fear and Greed Index clearly shows that Greed is progressively growing.
- Hindenburg’s team has become active to demolish the stocks.
- Plenty of traders kept long positions open.
Bitcoin
My viewpoint on bitcoin is positive, but let me explain why I have opened a short position. I conducted my study by examining market psychology and chart monitoring.
Single Strike
The God-level (crucial) barrier for bitcoin is between 28000 and 31000. This zone is extremely important because, during the previous bull run in crypto, bitcoin found strong support in this area. This zone has always protected bitcoin from collapsing. Bitcoin’s price is now trading below this God-level zone, making it difficult to break through.
Do you believe bitcoin has the ability to break through this zone in a single strike? Frankly, I don’t believe that it can be broken in a single strike, and I’ll explain why.
A major level cannot be breached in a single strike unless the market receives strong positive news. Another way to break is the chart pattern. The higher the strength of the chart pattern, the higher the probability of a breakout.
Chart Pattern
From the beginning of the new year in 2023, the trend for bitcoin has shifted from bearish to bullish. On January 1, 2023, the price of bitcoin was trading at $16500, when the bulls began their run after waking up from their slumber. This bull run has experienced a lot of resistance along the way.
1st Resistance
The first important resistance zone was between $23800 and $24000. Bitcoin tried to break it multiple times as it approached this zone, but it was unable to do so. After showing volatile behavior in this area, the price fell. As soon as the downside started falling, the upside regained control by taking support at $21500.
This drop is acting as a spring for bitcoin. The more you squeeze the spring, the more strongly it will bounce. The more powerful it is, the faster it can move.
The first spring was activated from $21500, which breached the bitcoin zone of $23800 to $24000.
2nd Resistance
For Bitcoin, the second critical level was $25000. Bitcoin attempted to break through this level multiple times but failed each time. The zone did not breach because bitcoin did not have the required power. Drop down to grab power, but all stablecoins trembled in the market because of the announcement of Depeg, otherwise, a bounce from $22800 level support would have been obtained.
In the end, bitcoin surged twice as fast as it fell, shattering the barrier of $25000.
3rd Resistance
This resistance is more strong than the previous two, which is why I call it god level zone. Bitcoin will require a lot of strength to break this level. Bitcoin will need to fall in order to regain the power to break out.
Bitcoin tried 6 times but failed to break through the $28400–$30000 zone. On March 22, there was a 6% drop in a few hours, which shocked me.
W
The way BTC broke the last 2 resistances, in the same way, this time also breakout will happen. The first drop will be at the support level, followed by a ‘W’ pattern jump.
To catch this downside movement, I have opened a short position. The 4 hr big red candle has given confirmation that there will be a fall so I am confident. The $25000 level will act as support from where the bounce will take place. After this, Bitcoin will continue the upside movement.
Several traders have opened exceptionally long positions, which will trap them. After the trap is completed, all of the buyers will leave and just the sellers will remain. Following that, it will increase to $30000 by trapping all of the sellers.
♦ I tried to explain everything in simple words, and I hope you learned a lot of new things.
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Disclaimer
This is not Financial Advice. This article is meant only for educational purposes. I am just sharing my thoughts and analysis based on my many years of experience.