Betting against Retail- Speculative Short on Bitcoin Pre-Halving

١٨ نوفمبر ٢٠١٩

I haven't taken a speculative in the markets since about March but I am looking to dip back in.

Not financial advice but here's what I am doing and why.

Don't follow me, I have a strong track record of doing foolish things.

My overall position is long bitcoin.

I am long bitcoin with my soul but in the spirit of stacking sats, I am looking to enter a speculative short position on BitMEX perpetual swap at $8,500.

Stop-loss $8,900, profit target $7,850.

Here's why:

Firstly, OBV has been trending downward indicating that buyer liquidity is being eaten by selling pressure.

The past two times this has happened spelt trouble.



Secondly, bitcoin price has repeatedly failed to maintain prices above key points.

First, it was the 0.618 Fibonacci Retracement level.

Second, it was the 20 WMA and 0.382 Fibonacci retracement level.

Most recently, it has been the 200 DMA.



Thirdly and most importantly, institutional investors are decisively short the bitcoin market and are becoming increasingly bearish in their outlook.

This one was pointed out in the filbfilb newsletter.

Data is based on CFTC COT reports.



Fourthly, there is a huge expectation of the halving been priced in shortly.

The simple reality is a sample size of two means nada.

With everyone expecting the market to start rocketing to the upside ahead of the halving, there is good incentive for big players to push it down.

Retail is always wrong. And the BitMEX funding rate shows most of the derivatives market is long. Which also means you get compensated for taking a short position as long as the funding rate remains positive.

I see the most likely scenario as bitcoin price sharply dropping to the most liquid area of 2019, which happens to be around $7,800.

I would expect significant buying pressure and liquidity to come in at this point.



I see the second most likely scenario as bitcoin price dropping to this level but continuing below and testing the 100 WMA.

filbfilb also pointed out the importance of the 100 WMA in his most recent newsletter and close below this on the weekly could spell significant downside.

Third most likely IMO is I am completely wrong and price takes off from here.

I lose some of my precious BTC taking the positions.

Tears are generated.

But life goes on.

Once again, not financial advice. Don't take any recommendations from me.

filbfilb newsletter that I referenced-

decentrader.com