On 11 July we were looking at the apparent downside continuation flag pattern forming in Bitcoin – as a reminder this is: sharp down then into a straggly upsloping price formation then back down. In that note I had a target of US$21,600 where a failure was expected. So far this has been exceeded slightly and price is hovering around that level now..
Read more: Blocksmith Says: ETH’s Higher Momentum Doesn’t Mean Higher Prices
In this 240 minute chart we can see that price tested the top of the flag channel just below US$23,000 yesterday. Notice that the upper wick of that candle was long and then drew straight back in. If you look at the candles of the prior channel top tests they have a similar character. There is an intrasession burst higher and then collapse leaving a long high wick. This is telling, it means that the buyers don’t control the high and in effect its a failure signal.
Sometimes you hear stuff like this “it’s going up because there are more buyers than sellers”. But this isn’t actually possible because we are in a matched auction market. The numbers of buyers and sellers are the same.
What changes is the urgency of each camp. People buy an instrument, not so much to own it but because they are trafficking in it. They want to get rid of it later at a higher price. It’s not ornamental, it’s a vehicle for profit. So urgency is all about “am I willing to pay up for this because I don’t want to miss out on even higher profits”. The answer at that spike top yesterday and all the previous ones were “no”.
So here we are at the top of the channel, momentum is somewhat lower than at the last channel top test and equity markets remain heavy. Preferred view: back down.