I don't want to be alarmist, but does it happen to anyone else that all this movement in the price of Bitcoin, that we are seeing at the moment, it seems unnatural?... No? It's just me?
An opportunity or a fool's trap
Perhaps many will describe me as incredulous, or pessimistic, but all this sudden movement in the price of Bitcoin is extremely strange to me; and not because Bitcoin has risen almost $2,000 from yesterday to today, because Bitcoin has certainly done similar things before, and even greatest, but because I think this movement is highly unnatural, because in the midst of a moment of great volatility like the current one, it is not sensible to think that this is the beginning of the Bull Run.
In fact, as of this writing, we have the price of Bitcoin at around $22,500, with an increase of around $1,800 from yesterday to today...
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And according to technical analysis indicators, it is clear that we must be very careful if we want to enter the market to buy Bitcoin at the present time, because its price may increase a little more before falling; but it is also possible that it will collapse to about $18700 as of now.
In any case, the drop is practically guaranteed in either of the two scenarios. And what technical analysis indicators do I use to argue what I am telling you?
I usually use Ichimoku, the RSI, the DMI and the MACD and complement with the Bollinger bands. And all these indicators tell me right now that you have to be careful, because in different timeframes I can see through Ichimoku that the current moment is of enormous volatility, which means that there is nothing stable or certain about the price of Bitcoin in this moment, more than the possibility of erratic movements in one direction or another.
The RSI does not say much in these cases, because it is usually overbought, so we can ignore it for now. Bollinger Bands tell me in general terms that the price can fall as low as $18,740 or so, but it could also go as high as $23,100 or so. The DMI tells me that there is strength and positive volatility, but the MACD shows me negative peaks and suggests in many cases a fall or loss of strength in the upward movement.
In fact, if I stick to what the MACD indicator is saying at different time frames, it looks like there is a divergence between what the Bitcoin price is currently doing and what it should be doing based on what the indicator spikes indicate. So be very careful what you do, because this all smacks of bearish cheating.
And you know what they say... "If something smells a lot like stew, looks like stew and tastes like stew... it's because it's stew".
Why do I say all this?
The truth is that I think we should always heed the well-known saying: "Buy when everyone is bearish, and sell when everyone is bullish." At the moment almost everyone seems to be over bullish, or believing that the Bitcoin trend is already definitely up, and they forget that at some point, those who bought below will take profits to go back to look for a lower point of purchase. .
And when everyone seems to forget that when it comes to prices, everything goes up and everything goes down at some point, that's when we need to be clearer in everything we do. That is why at a point when everyone seems to be bullish is when we must be more careful to select the point where we must take profits and exit the market in time.
And the same thing, but in the opposite sense, happens when everyone seems to be bearish, because it is at that moment that it is propitious to be attentive to select a point and position ourselves to buy.
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The mistake people make all the time
The mistake that most people make in most cases is to buy an asset when they see that it is going up a lot in price; and sell said asset (if they have it), when they're seeing that it is falling too much in price.
It is clear that throughout the article I am only talking about the spot market, or spot trading, and not margin trading.
But... Why is this a mistake?
Because, by doing so, they are acting exactly as the whales want them to act. Whales are experts at manipulating markets, because they are experts at manipulating masses of people, knowing that most of them act on impulse and emotion (by pure psicology).
Whales buy an asset and make it look like the asset's price will skyrocket, and they sell an asset and make the masses believe that the price will fall into the abyss. Whales only drive prices through strong tail blows that make the entire market march at their own pace and convenience.
And those who do not understand this (that is, the masses of traders who do not think but react), do exactly what the whales want them to do; adding more liquidity into the market through wrong buying and selling actions that end up generating losses for them, them, but big profits for the whales.
The reality is that nobody knows if we are really at the beginning of the Bull Run or before a bear trap, but when in doubt; caution is appropriate and necessary.
What do you think about the topic discussed? Please comment.
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