The Kairos Weekly #Bitcoin Recap - 4 July 2021
It’s time again for the weekly scenario posting, where we map out what potential scenarios could play out for #Bitcoin this week. This is not financial advice, but I sincerely hope you get to see the benefits of mapping scenarios and how it could help you in your trading journey.
ICYMI, I spoke more here about how important it is to plan ahead. I encourage you highly to read this.
Now back to BITCOIN…
Another week, another weekly close above the ~33-34k range, with this week looking strong and likely to close above this area once again (let’s hope I don’t jinx it :P)
Referencing back to the previous consolidation period we had early this year (white boxes), it rhymes in that there was a clear area that some parts of the intra-week price action played out, but subsequently failed to stay there long enough to close the week in that region (orange horizontal lines).
Don’t get me wrong - the overall price action still looks terrible (cue the chorus of the weekly head & shoulders pattern forming…) but what that means is that its clear how we have something tangible to look out for.
If Bitcoin continues closing above the range, we should expect price to continue in its rangebound environment until something fundamental about the price action changes.
If Bitcoin closes below this range, then its a shift in the current market structure and we have to be prepared to shift our lens a little when evaluating the Bitcoin charts from then on.
Third’s a charm?
On the daily, it looks like we are playing in a range within a range. With price bumping up against the mid level once again, having not succeeded the past two times, one might prematurely expect failure once more.
However, with price putting in higher lows, its actually relatively bullish from this angle, and recent price momentum could carry this through this time round.
And now.. the scenarios
Dropping to the LTF on the 4 hourly, let’s see how $BTC can play out this week.
Scenario 1 : Third ain’t a charm. Instant rejection at mid.
While there’s a chance that we put in a mini-rejection + another higher low, I`ll be watching out for the ~32700 area as that needs to hold for our higher low thesis to remain intact.
If that area fails, then I expect it to revist the range lows once more, and will probably take a short on it once it clearly breaks through that level.
Scenario 2 : Bullish MS continues, but face rejection at T1, retest mid, before higher.
This looks likely as, on past sustained up-moves, T1 has repeatedly been an area where price meets supply, gets rejected first, holds at mid before reclaiming that level on its second try.
In fact, if we do see T1 fail and the mid level hold, it would be a much more bullish move overall in the journey towards the range high. Would likely enter 1/3 upon holding mid for a long and add-on if price reacts accordingly.
Scenario 3 : Up-Only God Mode
Do I think this is possible? Anything is possible of course. But the trajectories of crypto hasn’t been so vanilla and straightforward post the May 19 crash. Perhaps markets participants have been spooked to a point that position horizons have been cut short and profit taking is more frequent. This is after-all, a trader’s environment.
That said, I`ll take the ride to the range high if it claims T1 and hold.
Happy trading week ahead!