Market Update:

Bitcoin Correction – Is It Over?

by decentrader · November 27, 2021

As shared via a public update Livestream we highlighted that following the rejection at $69.8k, we had received a warning candle on the 3-day Predator indicator while being up against the 50 DMA, which losing it would act as confirmation that bears were in control and that $53k would be the immediate expectation for price. 

BTCUSD 3 Day chart Showing Predator and 50 DMA

Part of the reason for the $53k area being a level price would gravitate towards, was due to it being where the 100 DMA was residing, but the other major concern was the volume of 10x Liquidations which had built up in a block between $55 and $58k, which acts as a magnet when the market is exhausted and leads to acceleration in price as both liquidations and stops are triggered at the market.

BTCUSD H4 Chart Showing Liquidity & SFP Indicator and the 100 DMA.

A little over a week later, we tested $53.5k, with a little help from the new COVID strain being identified in South Africa, which pushed the S&P500 down 2%. 

The correlation between c. 2%+ legacy market pullbacks and the Bitcoin price has been strong over recent times, with this being no different and leaving very little time for traders to act.

BTCUSD vs S&P500 Futures 1 Day Chart

As such, Monday will be a particularly important day as to what happens next, with the additional focus as a direct consequence of the uncertainty added to traditional markets, which occurred during the holiday season where traders are already risk-off and books are thin.  

As of Midday Saturday, we are looking at an initial Bounce attempt off the 100 DMA by Bitcoin, with there likely to be resistance at previous daily support at $56k.  The relief bounce which we are seeing is likely to revert back towards the 100 DMA where the CME closed for Bitcoin on Friday unless there is some surprisingly positive news regarding the new COVID strain over the next 24 hours or so.

BTCUSD H4 Chart with Moonraker Indicator, 100 DMA, 20 DMA

The Above chart highlights how critical it will be for Bitcoin to hold above the $50-53k level; as below there are a significant chunk of 3x liquidations risk which will trigger if these levels are lost. It would also mean losing the uptrend from the $30k bottom. Had there not been an additional curveball added to the markets this would have seemed unlikely and consolidation between the 100 DMA and 50 DMA would be our expectation, as it still is assuming that the markets do not panic and bounce on Monday. 

However, should this not be the case and global markets continue to risk-off, the 20 WMA lies down at $45k, along with the second Moonraker support level which looks at high areas of volume interest. Should Bitcoin find support in this rather grim scenario, it would act as a higher low and a platform to enable a third, more significant attempt at breaking all-time highs, in what we believe to be an extended Bitcoin cycle. 

Overall, the expectation from this new COVID strain is likely to result in either nothing – in which case Bitcoin can continue to do its thing, and will be likely to push towards all-time highs or, its significant enough where we will see a bump in the road which will lead to more stimulus and ultimately all-time highs. 

Conclusion – Time to focus on opportunities rather than seeing this as “the end”.

Don’t forget to take advantage of our discount on all our product and indicators which will end on 29th November.

Disclaimer: Nothing within this article should be misconstrued as financial advice. The financial techniques described herein are for educational purposes only. Any financial positions you take on the market are at your own risk and own reward. If you need financial advice or further advice in general, it is recommended that you identify a relevantly qualified individual in your Jurisdiction who can advise you accordingly.