Top Crypto Analyst Explores Bitcoin (BTC) Market Structure Giving Traders ‘Nightmares’
A popular crypto strategist says Bitcoin (BTC) forms a structure that tends to give traders sleepless nights.
Pseudonymous analyst Inmortal tells his 174,000 Twitter followers about Bitcoin’s recent pattern of a long consolidation followed by a brief rally and deeper decline.
“Recently, there is a structure that gives many traders nightmares. Let’s see why it happens and how to deal with it.”
Source: inmortalcrypto/Twitter
He says the structure has become so common because most people trade against the trend during bear markets. The problem is that there is no real demand during the downturn, leaving the average investor in bull traps and eventually liquidated.
“On the way down, the price is finding interesting areas with enough liquidity to get the price to stop and form a bottom structure, some price rallies and people FOMO [fear of missing out] Buy it while big players use these moves as a way out.
there [are] no new players and real demand to maintain an uptrend so the price sells off at the first resistance level and makes new lows.”
Inmortal then tells his followers how he thinks they could navigate this market structure.
“The first part of this structure is the local low, but the most important point is the high that forms after that, because after a boring consolidation, this will be the level where average investors will come in and big players will fade and sell them…
After a deviation/SFP [swing failure pattern]we usually see a sell-off that takes us to a low (the consolidation, not the local low). If the reaction is weak, new lows are likely to be made soon.”
The trader says that like other market structures, this too is likely to change as it repeats itself more and more people notice it.
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