Why I Sold All My Crypto in This Recent Pump and How Could it Be a Trap?
Why Pump? | Whales Game | Psychology | Cycle | Planning | What Am I Doing
Whether bitcoin has reached its bottom or not, its confirmation will take time. I still believe that bitcoin’s bottom will be around $10,000 to $12,000. In this Article, we’ll discuss the reasons why.
In the last article, I described the market’s current stage and the several types of cycles.
The exchanges are now operating in bitcoin’s “anger phase.” We have seen an upward breakout of the wedge pattern. Many people must have shed tears ( joy ) while watching the Altcoin rally because greenery has not been seen in many months.
The biggest concern at this point is whether a bull run is about to start or if a trap is being set to catch us.
First, let’s Discuss How Such a Huge Pump Came in Bitcoin (Crypto Market).
Whale Game
Some large whale or wealthy people purchased $4 billion bitcoins on the open market at Market Price. All of these positions were purchased in the future rather than in the spot. Due to the massive buying of these whales, over 100 million short position have been liquidated. This is the largest purchase of January 2023, as a result of which bitcoin soared like a rocket, smashing through all resistance in a matter of hours. Money has this kind of power.
Simply put, this indicates that the short position has been seen to be liquidated by this upmove. If it was for investment purposes, the purchase would have occurred immediately rather than later.
This is the first big trap we’ve seen.
Psychology
Let’s take a psychological look at the market cycle.
How do you feel about the market’s recent surge? Some will respond positively, while others may become angry. Good to know that you made an investment and are reaping the rewards. Second, you did not invest and must be feeling tricked.
The bear trend has many phases, according to market psychology.
- Observance
- Activity
- Confusion
- Panic
- Angry ◘
- Depressed
- Disbelief
Seeing several tokens affected, an ftx crash, an exchange problem, Bankruptcy and an altcoin’s continuous decline created a panic-like situation. If no one is panicking right now, the fourth phase has ended. The fifth stage has begun.
Market Cycle Chart
You should have figured out what happens in the anger phase after glancing at the market psychology chart above. The price rises during the Anger phase, and then a new bottom or lower level is formed by a little correction. We believe that following the correction, it will rebound after finding some support. This, however, does not happen.
BTC: Example Chart
You will also be aware that when bitcoin breakout of the triangle pattern from the $40k level, everyone smiled. After the pattern was fakeout a few days later, many people predicted that it would bounce by holding on to some level of support. But the bounce never appeared, and the price continued to fall and slip down.
At this time many individuals were stating that bitcoin would not fall below $35k, will not go below $34k, will not go below $30k. We’ve all seen what happened after that. Trust the patterns and price action, not your emotions.
When the Anger phase ends, the Depression phase begins. The people whose hope has been formed on bullrun now, if it breaks, will naturally be depressed. When the entire crypto market falls into a depression, we will realize that we have fallen into a trap. This is the point at which the stage of disbelief begins.
Let’s check out As Per Chart
The market is still in decline. We may anticipate two outcomes in this down trade. The price of bitcoin may be rejected at $21500, and if there is a huge red candle or a sideways collapse, we may see a shorting opportunity.
If bitcoin proudly breaks through the resistance level of 21500, the next level will be 25000. There is a chance of reaching $25000.
However, if we look at the chart, it appears that there will be a fakeout in bitcoin, following which it will fall.
After observing the market, everyone there is becoming more optimistic, and many people have begun to believe that bitcoin has reached its bottom. Please protect your cheeks and your money by not falling for any of these traps that might lead to them receiving a set back. If there is any uncertainty or worry that the market has entered reverse gear, exit immediately after booking profit.
According to the statistics, one more dump should be witnessed before the bull run begins. Now, only time will tell what happens next.
Trading Plan
If you want to trade, the two major resistance levels are $21500 and $25000. You should anticipate being short in that area. You cannot short if the $21500 barrier is broken since the market will then become bullish.
It will be known if the bull run has begun or not if bitcoin’s major resistance breaks after testing and any important moment is noticed from it.
I hope you understood this analysis.
There is no anxiety as long as we are riding on a higher-high pattern. However, if the higher-low line is broken, the trend will change to bear.
What Am I Doing
I had collected some coins at the lower level. I am getting 15%-20% profit in those coins, I am selling these coins. I am also selling my short term portfolio coins, I am not going to sell my long term coins. It is important to have some capital on hand so that you can do some trading and some deep buying.
The charts are giving me alert signals, so I am taking them step by step. I share with you the same things that I do for myself. My prediction is of short term bullishness but it is pointing like a trap. Focus more on selling instead of buying.
What do you think what will happen next in Bitcoin, definitely share by commenting.
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Disclaimer
This is not a Financial Advice. This article is meant only for educational purpose. I am just sharing my thoughts and analysis based on my many years of experience.