Cryptocurrency AnalysisTrading
The current chart indicate the last stages of market manipulation. Research confirms interest in BTC from major investors is growing.
In short:
- According to research, the major investors’ interest in bitcoin is growing.
- The behavior of the BTC price resembles typical patterns of the market manipulation.
- The current chart has two most important features of the correction: volume and structure.
- Both show that we are close the end of the declines.
The BTC situation is dynamic. Several things indicate that we are near the end of the price declines and market reversal
If you are interested in this topic and what major traders think about BTC then I suggest signing up for our mailing list (below). We will publish analysis there on a regular basis as the situation develops. We are now particularly interested in answering when confirmation of increases will occur.
"The biggest investors constantly manipulate the markets" was the claim of a trader I met
In one sentence: The current situation looks like the last stage of market manipulation, which may be followed by a reversal.
I have been interested in top traders and investors for a dozen years or so. I have listened to many strange and interesting stories. One of them may shed light on what is currently happening with BTC. We may be dealing with market manipulation.
The trader I want to write about worked for many years in a syndicate that manipulated the markets. Thanks to him I learned about several key formations that his group “drew” on the markets.
Two of these are worth describing because one is now clearly visible in BTC chart and half of the other just appeared. Both together could mean two very important things.
The current BTC declines are a correction, which will be followed by increases. We are close the end of the declines.
These two formations combined with several tools that the biggest traders use to analyze the markets (which I will describe below) make the BTC situation very interesting despite of the panicky headlines.
Especially that several different tools… show the same thing. We are dealing with the so-called confluence of indicators.
But that’s not all, the fire of the situation is added by the great interest in cryptocurrencies from the biggest investors. And they are not only not afraid to buy on dips, they like dips because they provide an opportunity for cheap entry into valuable markets.
Later in this article I will describe five tools that can be used to analyze the markets. The first tool is to analyze price and volume, just like a market manipulation trader would do.
Point 1: The current BTC declines are a correction that will most likely be followed by increases. We are close the end of the declines
In one sentence: According to the volume analysis – most likely we are dealing with an ending correction which will be followed by increases.
One syndicate trader told me that they analyze two factors: price and volume.
According to him, high and very high volume meant that the “biggest” players are involved in the market. Low – that they are not, that there are only small players in the market.
Corrections (declines) were characterized by much lower volume than strong impulse (trend) movements.
Volume reversal formations often appeared at the ends of corrections.
Now, it looks like half of such formations have already been drawn. Let’s take a look at the charts.
Chart: low volume in recent declines (green arrow at the bottom) – usually such volume characterizes corrections.
What does a volume reversal pattern look like at the end of a correction? Let’s look at the earlier correction in mid-2021 (two green arrows in the middle of the chart).
The right arrow – indicates clearly lower volume. Price has gone about $150 lower than before (there is a new low). The new low is made on lower volume.
A formation similar to this can be drawn nowdays, it is quite common in the markets. If so, it will look more or less like this:
Point 2: some big players use Elliott waves to analyze markets
In one sentence: according to Elliott wave analysis (this tool is used by many large traders) we are dealing with the last phase of the correction.
Waves are important tool. Some of the big traders use it for contextual analysis, some use them as their main tool.
Three main conclusions from the wave picture on BTC:
- The current move down is most likely a correction.
- We are close the end of the correction.
- The final downward move – “wave five” – is still missing.
Let’s look at how this looks on the chart:
Now let’s try, using three another tools, to determine a possible level where the correction may end. Surprisingly, all three show more or less the same area.
Point 3: Favourite average of big traders is just below current price level
In one sentence: The most important average, used for decades to determine a trend, is just below the current price level. Usually the price bounces strongly off it. The bounce area will be around 22,000.
The use of the SMA 200 average has a very long tradition, at least a century. It has been one of the main tools for determining the long-term trend.
By the way, a short remark: no tool should be considered as working always and everywhere. It is very important to see if the tools in question are currently working – that is, if they are currently being used by key investors. I will explain this in more detail in the next articles in our magazine, because this is a very important topic and poorly understood.
Let’s look at how the waves worked on our chart earlier. In points 1 and 2 we see that it worked. This could also mean that the big investors were already there.
I also checked how it works on D1 and it works quite well, also on the weekly I think we will observe a strong reaction.
Point 4: The envelope on the daily chart that previously reversed the move is... just below
In one sentence: Envelopes around averages are used by traders to indicate that the price has moved “too far” from an important average. In recent years, their importance has increased because many automated systems use this approach. The reversal area is around 22,000.
Envelopes have always been important, their importance has increased in recent years because of automated systems. In short, they work like this: if the price moves too far away from the average – it triggers an automatic reaction from the algorithmic systems.
With this knowledge let’s look at the chart below.
I tried to find an envelope that worked before – and it turns out that the lower envelope is currently slightly below the price. And this is where I would expect a reaction as well.
The average that is used to plot the envelope is again 200. In point 3 we can see how it recently acted as resistance for a downward bounce.
Here we are dealing with the area around the 22,000 level.
Point 5: It is very interesting to note that interest from major investors in BTC has grown strongly in the last year
In one sentence: One of the most important investor groups (perhaps even the most important from our point of view) is very interested in crypto investments. This group could bring as much as tens of additional billions of dollars to the markets.
Among the largest investors, we have three major groups: banks, hedge funds and family offices.
According to a recent research, the interest in crypto from family offices has increased a lot. Why is this important? There are three good reasons for this.
Family offices are the least known group of investors. They are private investment funds of the wealthiest families. They have enormous capital at their disposal. In late 2021, hedge funds had about $4.5 trillion under management. And family offices – about 6 trillion (or 30% more).
Secondly, the investment solutions and products that are created for them are later available also for smaller investors.
Third, generally speaking, the best of the banks and mutual funds work there – people who have earned their reputation as outstanding specialists.
Of course, in the case of the biggest ones, we won’t know exactly what positions they hold. So how can we gauge their commitment and future appetite for crypto? There are two such ways.
The first is to read the reports and analyses that are directed to family offices – the largest banks.
By the way: the largest banks have started offering crypto products for family offices.
Secondly, research the family offices themselves to what extent they are interested or involved in crypto. They certainly won’t tell us how much, but keep in mind that this industry can bring another 1-2% of its resources to the crypto market, which will equate to about 100-120 billion.
Reports aimed at family offices (at least the ones I know of) talk about valuing BTC at $100k or more in a few years. There are some that talk about a value twice that.
Another case: last year less than 50% of FOs expressed interest in crypto. This year, according to a survey from January – already 77%. This is a huge increase. And the survey took place in January – when we were already in the middle of big drops.
Let me repeat, because this is important: BTC was falling strongly, while interest in Family Offices was growing strongly.
The research I mentioned:
(from Barrons: „Future Returns: Cryptocurrency’s Future in Family Office Portfolios”)
“In February, BNY Mellon, in conjunction with the Harris Poll, released its first-ever global family office survey findings. Some of the most interesting data suggest a previously unheard of level of interest in cryptocurrency investments.
Of 200 key global family office personnel surveyed, 77% said their firms were exploring or investing in cryptocurrencies, with one out of five describing themselves as active investors.”
In short:
- According to research, the interest of major investors in BTC is increasing.
- The behavior of the BTC price resembles typical patterns of market manipulation.
- The current chart has two most important features of the correction: volume and structure.
- Both show that we are close to the end of the declines.
- One final downward movement is still missing.
- The first part of the reversal pattern has already appeared.
- Formations of this type were built by large traders and syndicates manipulating the markets.
- Several indicators show that we are nearing the end of the correction.
- What is interesting is that they all more or less point to the same place.
- Several other indicators used by large traders show a possible reversal area.
The situation on BTC is dynamic. Several things indicate that we are close to the end of the declines and reversal
If you are interested in this topic and what major traders think about BTC then I suggest signing up for our mailing list (below). We will publish analysis there on a regular basis as the situation develops. We are now particularly interested in answering when confirmation of increases will occur.
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