The market appears to be getting bullish. However, this seems to be yet another “false” indication. I know that there is a lot of positivity due to a possible FED pivot, and the fact that the whales have once again begun accumulation. However, these are isolated scenarios, lacking confluence. Firstly, the FED doesn’t really have much credibility at this point. Powell has come out on numerous occasions with a very strong and hawkish stance. There has been an ongoing reassurance from the FED that they will do “whatever it takes” to bring down inflation. These measures have not been very effective. However, they don’t really have many tools in their toolbox to work with.
If the FED decides to pivot based on one request from the UN, whatever credibility remains will be destroyed. Imagine playing the “hard game” and then just rolling over when you meet opposition. Powell will have to hire a speaker because I don’t see how he could ever take the stage again.
What you need to understand about the whales is that they are not like you and me. They require tremendous amounts of liquidity. This ultimately forces them to begin accumulation prior to a bottom. In other words, in a perfect execution of strategy, they will begin accumulating a month or two prior to a perceived bottom. If whales wait for a bottom, their purchasing will simply push the price higher and eliminate their gains. Whales need to buy into falling prices, in order to establish a good entry.
The Current Support
There are many who are stating that the support at $19K to $20K is rock solid. However, they don’t realize that this is by design. It’s a setup to create an enormous amount of liquidity. This will eventually be plundered by the whales and will serve their agenda of “real” accumulation. Once again, isolated “knowledge”, void of emotional intelligence, in regards to “what are the market participants “doing and planning”? Furthermore, as I previously highlighted, support that is constantly revisited wears thin and ultimately gives way. Looking at the charts, I wouldn’t expect this little pump to push past the $20.800 level. In a best-case scenario, I would anticipate the $22.800 level.
Looking at the volume, it becomes even more apparent that this is not a move that is about to mark the commencement of a significant rally. The volume is almost laughable. There’s nothing there chaps! Furthermore, with all the boring price action, comes another problem. Exchanges are not enjoying liquidation events. Retail investors have been a bit scarce, and if you want them back, you need to have them believe that the market is about to “move”. This entire scenario reeks of yet another, sorry to say, bull trap.
Markets unwind in a bear market. It’s not a simple case of down and then up. There are numerous occasions where participants desperately want to see the market begin a recovery, and subsequently lose touch with reality. This usually takes place on the back of one or two positive events that are then overexaggerated and blown out of proportion.
As I have said, expect to see the $19K support being lost. It won’t be long before this enormous pocket of liquidity gets plundered by the whales. This is a waiting game. The over-enthusiastic pay the price for their unbridled zeal. This should not be considered investment advice. Please conduct your own research. See you all in the next one!