Trade Travel Chill
Trade Travel Chill 4 minutes reading from Bitcoin

Daily Bitcoin Price Analysis: Market Makers Lose Confidence

1/9 News is always used as the excuse to move the market, not the reason.

Let me prove it...

I track the daily liquidation levels for open positions for BTC and ETH on Binance in order to give me an edge on my trading.

This helps me to know when a reversal is likely.

2/9 When the BTC delta gets over 20B, that's when I start looking for trend changes.

Before this number, the Market Makers need to induce retail to open positions. Our open positions all come with stop losses or liquidations set by the exchanges = the market makers liquidity.

3/9 They do this by: - Issuing fast moves in one direction to get retail to fomo - Move price out of a range in to a trend - Hit your stops so you commit to a new trade (revenge trade)

So last night, before the FOMC announcement, the delta was only at 5B.

4/9 Based on this they couldn't cause a trend change. So instead, they issued a double-sided liquidation hunt to take out the highest points of liquidity available both sides of price.

We got the number we expected, it didn't make sense for the market to react the way it did.

5/9 Until you understand liquidity...

The yellowish zones show where the highest levels of liquidity was above and below price before the FOMC announcement.

It's not a coincidence that price wicked both sides to where it did. It wasn't your nana selling her assets in a panic.

6/9 Next step, get retail to commit more liquidity...

Job done, we now have retail basically guessing up or down and opening very large positions both ways.

MM says yum, yum.... but it's only an appetiser so far. Delta only at 7B to the shorts.

How will MM increase this...

7/9 If BTC was to retrace to somewhere between 38.2-61.8 fibs since last nights move (18,880-19,360), MM collects all those current open short positions circled whilst building their own positions.

They could then drop price further and take out all those longs.


8/9 This would make the target somewhere between 16,880-17,580 and guess what's there...

The next level of high liquidity...

9/9 Now before you say, "but the whole market dropped".

Again, nana's fingers ain't that fast.

Google Aladdin. Only AI could move that many markets all at the same time at such speed.

Liquidity just predicts where the targets are.

This post is based on this twitter thread.


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