CTO’s Technical Analysis of Bitcoin: Sept 09, 2021
Note From CTO – Technology
Every day, new trading platforms are coming online, current platforms are improving their processes, and more traders are joining exchanges worldwide. How does this affect us as traders?
Major corrections, crashes, and Bart Simpson patterns (giggle) are fairly regular with any cryptocurrency. More traders and more platforms (automated trading) equal faster and harsher corrections. This can also result in service interruptions for exchanges. The infrastructure for exchanges is not necessarily able to handle the influx of trades that can occur during major moves.
Current exchanges do not have the same ability that the stock exchanges do. Stock exchanges will halt trading if there is a major crash in process (aka Circuit Breakers).
There are 3 levels to the Circuit Breakers:
- Level 1: -7% (S and P 500) – halt for 15 mins.
- Level 2: -13% (S and P 500) – halt for 15 mins
- Level 3: -20% (S and P 500) – halt for remainder of day.
I received emails from Gemini, Pax, and Coinbase during the last correction that services were affected.
This is very problematic for all of us because if we cannot execute a sell (manual, automated, or stop), we are at the mercy of the exchange.
Trading is not for the faint of heart. It is extremely difficult and be highly complex, especially when you dial into trading with some sort of system, algorithm, or platform.
At the 40,000 foot level, we all want to sell just before the crash. This is very difficult to do, which makes the new indicator down below very interesting!
72-Hour Bitcoin Price Expectations
Price will stay in a sideways channel, trolling Support 1 (new resistance) until bulls can take control.
Bitcoin Daily Chart Analysis
BTC had a -17% correction shortly after posting my last blog post, which ended up recovering to an -11% correction. Support 1 was blown through and a test of Support 2 occurred during this last correction. While BTC moved back up to a -11% correction, Support 1 (acting as resistance) was rejected.
Subsequently, Support 1 was broken on the next candle and is now acting as resistance until price action can sustain above Support 1.
I do not believe this correction is over. BTC may zig-zag a bit and dip more to Support 2. Or the bulls may keep the price sideways. I do not see any type of major rally building at this point in time.
Here is a new indicator I have been testing that perfectly called the correction and had a nice sell point on the candle prior to the correction! Remember, you cannot rely on a single indicator. As a diligent trader, look at many factors before making a decision.
Bitcoin 12-Hour Chart Analysis
The 12-hour chart is looking just like the daily chart. You can see wicks on the candles since the correction took place. A lot of indecision in the market.
Support 1 is currently testing as a resistance point.
Indicators are showing some life and BTC might see a zag!
The new indicator I am testing is showing that it is near a bottom and wants to turn around.
I suspect BTC will troll Support 1 (current resistance) until the bulls can gain control.
Bitcoin 1-Hour Chart Analysis
The 1-hour chart is confirming the trolling of Support 1 (current resistance).
The 1-hour indicators are currently cycling (down).
Watching the trolling of Support 1 (new resistance) could give us an early indication of some sort of movement, up or down.