Bitcoin – Looking for Value Vol.14 : Hypothesis

After the motivation had subsided and the “healthy” correction started, I thought to myself I would do another episode of the exciting series> Bitcoin looking for Value
Since I sometimes work on the articles in several stages, sometimes new impressions come in in between, which I incorporate and which steer my flow of thoughts a little off the rails. Sometimes I’m a bit scattered, but in the end everything usually comes together. So also in this post …

After I expressed my concerns about a possible price decline in my last post “1% Club” and received a lot of encouragement: Thank you very much for every single like! That made me really happy! Now that the correction has started, I’m of course annoyed about my stubbornness not having sold a portion of BTC and of course not that amused. But in the end it can be sausage, because one way or another I hang on the BTC and like it exactly where it is currently: on my wallet.

A mega awesome sentence from the comment section will accompany me forever: The Bitcoin is a digital Picasso of the financial industry and a Picasso is not so easy to sell. With this phenomenal wisdom I can live great and deal responsibly with any correction. Many thanks to the user AdGt for this great sentence!

But further in the topic :::
In fact, the BTC has apparently found its value for the time being: $ 40 ,000 is a very, very proud sum … brutal how quickly you get used to these heights …
A lot has happened since episode 1 of this ongoing series and I am very happy with where this odyssey has taken us or me so far. For me this is my BTC diary and I like it … In the first episode I had no idea how it should go but and meanwhile the story is slowly building up and actually starting to make sense.

If we look at the various volume profiles that are visible on the chart, we can see some nice distribution curves, which now serve as stable and fundamentally and actually existing static trading levels.
I like to draw these zones / volume profiles over blocks of price action, from swing to swing, over correlations and how it makes the most sense for me. Here you should just try around until you are happy.
Similarly, I also like to do it with price action, I tune the timeframe until it looks like I’m happy with it.

In any case, the market has built a very nice structure for us here and created some very nice balance ranges aka happy ranges that we can work with from now on.
I really like to use the happy ranges to do destination trades, which is nothing more than a test of the other side of the value area when we break into a balance.
Of course this doesn’t always work, but often enough that it is super profitable and a complete “trading system”. I hate that term, but it makes things a lot clearer.

Currently (that was yesterday …) at the time when I am sitting on the post, the price is below the last full VA and even if I don’t like to say it, I have the impression that we are going to go deeper here and correct further. But since I wrote these lines yesterday and the price has achieved its goal: to achieve value area high, the hypothesis is void.
Now it would be great if the price is accepted and traded at the current price level so that all market participants, algos and quants agree that we all want higher prices.
Great that the price actually made it and made these lines possible.

Every VA that is below (and of course above) the current level acts as a possible S / R zone and offers scope for a small bounce or even a complete reversal towards new ATHs (that would be nice, wouldn’t it?). Whether that is likely or not, no one can determine in advance, the rational mind of course continues to assume that prices will fall, which would not be so bad, because quite honestly: the BTC has done its job and can rest for a while. However, we live in crazy times and why shouldn’t the price just keep rising? Nobody Knows. And as of today: Fire at once again ATH 🙂

The price moves to where momentum / acceptance and lots of transactions are processed or where the “demand” comes in in the form of market orders. If the market is hard short, then everyone who notices the momentum shorts until a market participant big enough says stop and slowly but brutally brings the price back up on track. Apparently someone has changed the course, which means that people are buying hard again. Momentum is up, so every Algo and Quant is buying everything up the price ladder.

Based on my article about the “Squeeze and the Innovation Curve”, the weak hand hipsters could simply be liquidated from the market (has it already happened?), The inventory (was the market too long?) equalize and then when everyone is stopped … it goes up again diligently and in big steps – as we can see today, this is exactly what has occurred.

With the contributions I try not only to add value for the community but also to “perpetuate” a beautiful picture book of my ideas and thoughts for myself. I think it’s great that everything fits together so nicely and that you can actually learn something from it. Even while I’m writing this stuff, I keep coming up with cool ideas that I then like to implement or try out afterwards.

The oblique connection with the value area trend lines was created freely when drawing. And only now do I notice that it was actually an extremely smart thing. I’m not a big fan of trend lines , but from now on this “variant” is a great way for me to add a variant of a “value trend line” that makes sense to me in my personal toolbox. At least it looks very promising. We’ll keep watching. Stay tuned!

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