BTCUSD Shorts are higher than the April 1 despite Bullishness

5 May 2019

First things first will be the longs and shorts chart which shows the longs have dropped some 30% since the April Fools Day Pump and the shorts have gone the opposite direction, up 45%. Now, in general the idea is most traders will be wrong, and 90% of margin traders will lose 90% of their money in 90 days. There is also the fact that this is a unregulated market and the whales showed just last month that they know how to do a short squeeze with a whole lot less juice for the squeezing. The longs appear to be coming down as profit taking and the shorts going up show an interest in the price getting rejected at the 50w MA.

Secondly, since the price has just gotten over the 50w moving average and we should be looking at testing the 50 as support sometimes soon, right? Perhaps an even outright rejection and the price of BTCUS falling off the table, right?

The chart below shows the three historic crosses of the price action moving above the 50w and closing above it. Two out of three times we have had a parabolic advance and on the other occasion we retraced some 30% and then broke the 50w and went parabolic.

You could throw on a lot of indicators to look for bearishness or bullishness but the one I want to look at today is the On Balance Volume with EMAs. Just like any moving average system things are the most bullish when you have the price action/OBV above the fast-moving average, and all the other moving averages are stacked fastest at the top and slowest on the bottom. Conversely things are the most bearish when the slowest moving average is on top and the faster moving averages are in order beneath and the price action OBV is at the very bottom. The purple circle in the chart is the OBV and the 10 and 20 EMAs getting a bullish stack prior to the price action breaking the 50w as resistance.

• Point 1 on the shows we hadn’t achieved and maintained the bullish ordering of the OBV & EMAs as the 10 was still below the 20 EMA and by the time the 10 and 20 crossed bullishly the OBV was already crossing them bearishly so that was not a healthy and mature break of the 50w resistance.
  
• Point 2 shows that the 10 and 20 EMAs had a bullish cross PRIOR to the price action breaking the 50w and then OBV blasted through the 100 EMA and shortly after the EMAS were stacked full bull. You can see the OBV coiling in-between the 10 and 20 EMAs prior to breaking out, just like price action getting tight inside Bollinger bands before a big move.
  
• Point 3 shows the EMAs were tangled as the OBV formed a rough ascending triangle against the 100w EMA and finally ruptured past the 100W EMA and then once again the price action broke the 50w and the OBV EMAs went full bull and the price action went parabolic.
  
• We are at point 4 right now. The OBV 10 and 20 EMAS crossed bullishly, the OBV and 10 period EMA are above the 100 and we just need the 20 period EMA to get above the 100 and we will once again have the same volume conditions for a parabolic advance. The 10-20 OBV EMA cross once again occurred before the price action broke the 50w MA. Point 4 more closely resembles point 2 and point 3, which had a successful break of the 50w, as opposed to point 1, which had price action fail to break the 50w MA
  

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Conclusion
We are about to close a candle above the 50w and it would be normal to expect a potential immediate retesting of the 50w. While there is some money to be made for the intra-day traders looking for that dip I don’t think that is why the shorts are so high over the last month.
My last post was to remind people we are still in two bullishly nestled patterns, with a BARR inside a Falling Wedge and the targets for those take us well past the 50w MA. With the bullish volume situation volume situation and the nested bullish chart patterns performing perfectly so far the high level of shorts seems like it will be fuel for the next pump. Is it possible for the Falling Wedge, BARR and Volume situation to be inaccurate and we have a Point 1 incident? Of course, but the odds seem really low right now.

Misc notes on the chart
I like to show the Bitfinex longs and shorts with the bitfinex price for obvious reasons and that is why the main chart is using that ticker. Right now due to the Tether situation there is a difference in price between Bitfinex as the main tether exchange and kraken, which I am using for Point 4 because they have been repeatedly shown to be the least spoofed exchange. I am using BLX for points 1-3 because it is the only ticker you can really run the OBV analysis on for 2012 due to BLX’s long history.

11 May 2019

Not

We have officially gone parabolic. There is no telling how much longer this can last as we continue to see price action THRUST upward.

I am personally looking at moving my stops up ever 12 hours so I can get as much out of this as I can. I have a margin position that I entered at 5,7ish and I am incredibly pleased with it. I know when I eventually get stopped out there will be some sadness that what may have been my best trade every so far is over.


My non-margin position is even lower down and I can't see exiting that for a long time.