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1/Most on CT do not recognize the difference between the late Dec rally & the Feb one. The 1st was sound--I was even looking for possibly $5k $BTC before it became clear that was extremely unlikely. The Feb one was different. It was a set up for the degree of violence in the drop
2/to $2k. A giant bull trap that shifted positioning to extremes that set the stage for mass margin call liquidations & panic selling. Anyone who says the $ETH fork run-up is different from the Nov $BCH run-up, so the market may have LT bottomed, is just wrong. These things are
3/immaterial to the overall picture. Whether $ETH forks or not, how it forks, etc is not driving the overall trend, nor can it change it. This is a break-& retest of the overall breakdown thru $6k $BTC, that's tested twice & the 2nd was structurally just different. You must do
4/your analysis from the outside-in--LT to ST, not extrapolate LT from the ST (what the majority of CT does). In 8/ is a chart @JonnyMoeTrades tweeted that I annotated over that shows Bitfinex ETH/USD positioning--longs & shorts. Look at the Dec rally--shorts didn't change from
5/start to end on a net basis. Then look at the Feb rally--shorts COLLAPSED by ~63%. Longs increased on both moves a ~ amount. If a ~ amount of longs were added & shorts collapsed 63%, why was the Feb rally significantly smaller? Positioning should have resulted in a LARGER move
6/in Feb than in Dec. Instead, it went the OPPOSITE way. Bitfinex positioning is not the positioning of the entire market though. Bitfinex is geared towards traders, not LT holders. The only reasonable explanation, given the way Feb developed, is the difference was made up by
7/other exchanges. The vast majority of crypto exchanges worldwide are long-only. All exchanges in Korea are as well bc margin is illegal & margin is required to short. Binance is long-only. Etc. The only real way the positioning changes at Bitfinex, ~ to the changes at all other
8/crypto exchanges geared for traders, could have occurred is if LT crypto holders were DUMPING their longs into the Feb rally at all the long-only exchanges. Meaning Feb was a total bull trap exacerbated by the $ETH fork. If LT holders were DUMPING into the Feb rally, NEW MONEY
9/IS NOT COMING IN. Given Bitfinex longs & shorts are at extremes associated w major tops, what is the ONLY MAJOR trending move then possible? A move to $5k $BTC or new ATHs? Or a crash to $2k? Most of CT is dancing on a Jenga structure--no clue what's going on. The people making
10/long setups now are setting trades up on the precipice of a cliff. This can work sometimes but if you do this consistently long-term, it will result in net losses. You must always maintain awareness of the overall picture of what's occurring. A move up one month does not mean
11/what it may have a prior month. Short-term analysis can never be done accurately in a vacuum--it must always be done w/in the context of the medium- & long-term. Otherwise you'll be dragged around by the market like a small child jerked around on a leash by a feral great dane.
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