A practicing trader and founder of the Crypto Shaman project, Vadim Shovkun.
To assess the local situation, we study Bitcoin’s movements on higher timeframes and the factors influencing the market.
The Grayscale effect
Based on statistical analysis of the correlation between Grayscale share unlocks and Bitcoin movements, certain patterns have been identified.
Red dots mark unlocks that coincided with selling bars, green dots — with buying bars. Light green and light gray dots mark unlocks with minimal volatility (less than 1%). Twelve red and seven green days are highlighted — selling days predominate.
Now we translate the above observations to the Bitcoin chart itself. Transfer rules: the bigger the unlock, the thicker the line; the line color matches the candle color; the dashed line indicates a non-volatile day.
From the chart, the following conclusions can be drawn:
- Large unlock clusters generally led to price declines within their range;
- After large unlocks, price paused its decline and bounced (or flatlined). The end of a cluster is a kind of extremum;
- Peak unlocks either preceded a strong daily decline, or occurred on the same day or one day before a sharp drop.
At the moment, all major unlocks have been completed. This suggests that the statistically identified pressure on Bitcoin from Grayscale’s shares has temporarily abated. A more detailed analysis of Grayscale share unlocks can be read in the article.
The S&P 500 index
Last Friday the market closed lower. The situation repeated on Monday. During the week, selling was almost completely absorbed. A move above the 4375 level would confirm the continuation of bullish sentiment, which in turn would open the possibility for Bitcoin to rise.
Bitcoin price
On the daily timeframe, the price has been moving in a downtrend for two months, with only one false breakout on June 13-17. Major levels behind which liquidity zones lie are the red and green zones. The bounds of this accumulation ($42,460 and $28,688) mark turning points, after which the price will continue moving in the chosen direction.
Within the downtrend, two zones have formed, the last zone where the price has been moving for a month. The chart indicates the direction of the major forecast.
Analyzing the latest bars from a VSA perspective, a strong buyer appeared with an elevated (engulfing) volume. The body of the candle confidently engulfed the previous two days of selling. Yesterday’s daily volume was merely elevated, but it could be enough for a bounce.
On the eight-hour timeframe, mid-term buying is recommended, as well as looking for zones for further scalp entries on shorter timeframes. The overall market mood is currently favoring a rebound.
Under the level of $30,130 a substantial liquidity has been gathered. A new shelf has formed at $29,175, which is part of the liquidity cascade in the $28,000-$29,175 zone. This zone is now the bears’ last barrier before breaking out of the two-month range to the downside. Until the price touches this zone, consider trading inside the monthly range (not a breakout).
Yesterday at a conference Elon Musk stated that SpaceX bought Bitcoin. On this news, the price surged to the upside around 20:00–21:00 MSK, touching the PoC of the monthly range, after which selling followed with strong engulfing on the hourly timeframe on elevated volume (UT).
The upthrust halted the impulsive rise from $29,500. Before attempting to retake the PoC, wait for a pullback to the green zone $30,900-$31,450.
Medium-term buys should be considered, placing orders in a grid in the green zone. The turning point (cancelling the scenario) is touching $29,175. For now, the movement priority is upward only.
The first meaningful upside target lies around $35,900; here one should consider taking initial scalps of entries and partial profits of accumulated positions on spot.
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