Bitcoin Resistance: OI Falls as Spot Buyers Absorb

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Bitcoin is pushing into resistance while open interest is declining, [music] but cumulative volume delta is rising. What does it mean? Can we break above this resistance or are we about to see a rejection? Let's analyze the probabilities. [music] >> [music] >> My Crypto Paradise >> Hello ladies and gentlemen of Paradise Crypto.

This is Simon from My Crypto Paradise. Welcome back. It's great to be here. Today is Tuesday and that means that you're watching the first video of this week. So previously we were talking about that with the highest probability Bitcoin will revisit $79,000 before we will start breaking below the previous low made exactly at around $57,000.

So on the daily timeframe I'm still bullish, okay? Even though we have extremely slow price action, but we understand that the context is that we are in a summer, right? So during the summer that's always the liquidity is low and Bitcoin is usually consolidating, but the market structure is still bullish.

So on the daily timeframe there is nothing has been changed and I do believe that $79,000 will be hit before we can start pushing below that $57,000 mark. Then we were shifting our focus on the lower timeframe because we understand that towards that $79,000 we will not go with a straight line.

There is always some price action going on, right? So we have been also focusing on 4-hour timeframe. So the price action on 4-hour timeframe told us, based on analyzing what's going on behind the scenes, that with the highest probability the market makers will push the Bitcoin below this low timeframe support zone.

We will liquidate some of the over-leveraged long positions and then we will start pushing back to the upside with the highest probability. So as you can see that's kind of what happened, right? So right here we have all right there is loads of long leverage longs are being crowded we need to have some kind of shakeout because if the market makers will push from here to the upside it will be very

difficult for them right because we need to understand when a lot of people are in a long position most of them are gamblers so every time and they they are seeking this kind of dopamine right so when they have profit they take it right because they just want the dopamine so when they see some small green number they want to feel good they take the profit and that will put a pressure

on the price because every time you close a long position you need to sell the contracts right so that's push a pressure on the price action so if the market makers would want to start the next bull trend on the low time frame from here it would be very difficult for them and they would not probably make much money so the better thing is to actually liquidate those over leverage long positions

right and then start pushing to the upside so that's what happened we have liquidated that over leverage long positions we have touched our support for the third time right at $62,500 that basically is the key level that makes this structure on the 4 hour time frame that started back in beginning of the July that keeps it still bullish and because of that from the medium time frame perspective we still believe that

before we will start breaking the secondary wave from the hard degree perspective right so now we are getting back to that $79,000 we will not go through a straight line we know that this is a motive wave structure that means it subdivide itself into five small waves so we need the secondary wave right so that basically increase the probability since we still hold the $62,500 a key level support zone that before

we will start creating the secondary wave we will touch that $69,000. We talked about that this will be a nice swing short opportunity. We will talk about that a little bit more later, but right now we need to understand what actually happened, right?

So so very good was that we have reclaimed the moving average trendline on the medium timeframe with this push to the upside. I also like the volume, so there was a lot of participation. And in the latest video, we also talked about the open interest and the leverage that is in the market because we have been taking a look at the funding rates and we saw on our website marketcaprates.com you can

monitor the funding rates with a long squeeze short squeeze probability. And also this funding history is very important, so you know that our key level is plus 10% every time basically in the past year, every time we touched that plus 10%, we have started to see offloading of that leverage, right?

So the same thing happened right here. We have went close to that plus 10% in this video in in these videos that I'm recording for you every Tuesday, Thursday, and Saturday. Well, in one of them, I don't remember if it was the previous one or the one before, but I think the one before.

So I warned you, right? That we are getting close. So if you are in a long position, be careful and take a look at that. Then we have started to offload the leverage, right? But what we actually understood in the latest video is that the long positions been actually entering at a strategic level, right?

And we have been taking a look at the open interest. So right here, the long positions started to enter, but the market sentiment been actually bearish, right? So what we understood, they will start to offload, they will start to offload their long positions that will put a pressure on the market, right?

So, we saw this uptick and open interest henceforth. And then we also took a look at the funding rates. So, we understood this is not new short positions entering. This is long positions entering. Then we took a look at the sentiment, as you remember, right?

On our fear and greed index. So, we took a look at the sentiment. We understood, all right, it's bearish, right? So, I've told you I want to see that we go to the previous low or to this support, which is This was the previous low.

This was the previous resistance. Now it's going to act as a support. I want to see as we offload what's going to happen if it's going to be absorbed, right? And then we have been watching with the Bybit team the cumulative volume delta.

And we've actually saw that the offloading of that long positions. And again, if you close your long position, you automatically put the pressure on the market from a short side, right? So, there needed to happen the exchange, right? So, the long positions been closed right here, right?

They were longing at support. Well, they've been opening right from here. So, they've been opening long positions at support, which was the smart thing to do, right? Then we have been consolidating, but the market went into a fear mode. So, they Most of the market participants were not really confident in their long positions.

So, they started to close their long positions, which put a pressure on the market. And then what we talked about in the previous video, I want to see if that's going to be absorbed. And it was. And by the spot volume, which is very bullish, all right?

So, they've been offloading, right? The leverage been offloading. This is cumulative volume delta shown only on the spot exchange. So, the spot absorbed that selling pressure. And that's that that is really bullish, all right? So, right now this price action is not made out of borrowed money.

This is actually spot money. All right, this is money that the market participants had. All right, which is usually something that we call a smart money, which is increasing the likelihood that this bullish price action is going to have a continuation higher. All right, so I like the volume as well.

There was multiple participants in there. So the volume with the price action has been increasing and uh the the cumulative volume delta as well and the open interest been declining. So I like that. I like that, which is increasing the probabilities that we will see a break above this resistance.

Okay, so this low time frame resistance is made out of two boundaries, right? We already analyzed this one in previous videos like 2 weeks ago probably. We are still playing with this resistance. It made out of two important Fibonacci retracement levels and VPVR activity is there for multiple time frames.

So right now, we can see that we are also following an Elliott wave structure. So this was the first wave, secondary wave. Right now, we are we have finished the third wave, right? 1 2 3 4 5 because that's a motive wave structure.

So five sub waves inside of that hard degree third wave. And right now with the highest probability, we are creating the fourth wave. Okay, the fourth wave is usually an alternation of the secondary wave. We can see the secondary wave was kind of quick and deep, right?

It went almost to the bottom of the previous first wave. If we take a look at our Fibonacci retracement tool, we have stopped not exactly, but you can see 618 has been working very well, right? So we have we have got a nice support right here.

We should not go that low on this fourth wave. It should be more sideways and it should be more shallow. All right. So, if you take a look at the Fibonacci retracement right here by analyzing the hard degree third wave, we are having a strong support that is confluencing with the previous one, right?

From the previous price action, which is sitting at around $63,500, ladies and gentlemen. And if you can see in the previous historic price action, it was working as well and then as a resistance right here, resistance. Then we have got a nice wick right here and as a support right here.

Very important level. All right. So, $63,500, it's a key level for me. It's also the top of the first wave. All right. So, anything below it, if you will start going below it, I will start doubting this bullish structure. All right. But what I want to tell you is that we probably should not go that low before we will start breaking above this resistance.

It's just probably this. It's not a certainty. It's just a prob And as a as a professional traders, all we care about in order for us to be able to understand if we should go into some position and how much we should risk into that position, is very important, right?

So, it's like professional poker. Most of the professional poker players, the ones that are winning in the long run, not only they in 80% of times, they fold or they they lose a little little little amount of money. So, most of the most of the night, what they are doing, they are taking small loss.

So, they are and delaying the dopamine effect. They are delaying their gratification, right? Most of the noobs in the poker, they are they are bluffing and they are always trying to things to the bluffs get the small pots, right? Because other people will will fold on them.

But then in a rare moments, these noobs, they lose a lot, right? So, they 80% of times they win a little, so they have a lot of dopamine, they love it, right? They are really risk-seeking, and then in two hands they lose everything.

The professional poker players, absolute opposite, right? 80% of times, most of the night they are losing small, and then in only few good hands they win big. And this is exactly the strategy of professional traders as well, right? Most of the times we wait or we take some great risk reward trades, we might be losing on the tight stop losses, right?

But then we hit few winning streaks, and we win most of the most of the money over the year. So, for example, in 12 months we might have only few weeks in a year where we make actually 80% of our profits. It's because we are patient to wait for the high probability trade setups only, and we have great risk reward strategy as well.

So, it's about defending This is your money basically, yeah? So, you defending, defending, defending, all right? And then in a very short period of time you expose yourself to the market, okay? And you put your pots in a in a big risk in a very short period of time.

And then again, you defending, defending, defending. Okay? So, this is important to understand. It's also like a great war strategy that has been made with great armies generals as well. It's this kind of defend, defend, defend, then understand that there is some empty spot in the other party army, and attack there, and then again withdraw, defend, defend, defend, wait for the opportunity, then again attack very quickly, and then again go back,

right? It's this this kind of like universal law. I don't know how to explain it, but it's something that happens in one spectrum like poker or trading, you can apply also to the battleground. So, right now, ladies and gentlemen, the probabilities are that we are completing the fourth wave.

We should not go as low as towards that $63,500, but if we will, I will be watching like a hawk because this will be very strong support, okay? But, we are waiting for the completion of the fourth wave, and then, once we get that, the high probabilities are that we will start pushing towards above the $64,800, which is the upper boundary of our low time frame resistance right now.

If we will complete that fifth wave, this is going to be very good for our high time frame prediction of hitting that $79,000 because it will increase the probabilities that we are right now completing the higher degree first wave. Why? Because in the higher degree first wave of that even higher degree C wave, we need to complete the ending diagonal that will take us with the highest probability towards that $69,000, right?

And we know that the ending diagonal subdivides itself into five small waves, right? So, we have completed first, second, and right now we are doing third with the highest probability that might take us towards $67,000, and we understand that we have completed that uh it's a corrective motive structure with the highest probability it's going to be a zigzag, and we know that the A wave of the zigzag was already completed right

here. Right now, we have finished the B wave, and right now we should be starting the C wave. The C wave is a motive wave structure, so it subdivides itself into five small waves as well. So, once we can confirm that this will be a motive wave structure, all right, it will complete this, and then we will start the secondary wave.

It will already confirm the trend that we will start pushing higher, right? Because you are waiting for actionary waves and reactionary waves. So, basically, you want to make sure that you can recognize the trend once you see some motive wave structure. So, if we are having five waves to the upside, the continuation of that trend in the same direction is much higher.

If we are having five waves to the outside, continuation after some pullback in that trend in the direction where you have seen the previous five wave is much more likely, okay? So, right now, ladies and gentlemen, we are waiting for that. I really like the price action.

If you lay If you take a look at some momentum, so, for example, you might say, "But, Simon, here we are already creating bearish divergence, right? So far, we have created lower high, but on the MACD histogram, we can see already higher high, and the momentum is already fading." You're absolutely right.

This might be kind of dangerous for the bulls. Definitely. That is why, as a professional traders, we are waiting for completion of the fifth wave structure in order for us to be able to say with very high likelihood that really the trend will continue in the same direction.

That means upside, right? So, at this moment, however, the probability of this bearish divergence is still not confirmed completely. So, there is some probability that this will be a bearish divergence because we are already fading on on the momentum. However, we fading on on the momentum during the corrective wave, right?

which is the fourth wave, which is absolutely fine. So, always, I'm telling you that context is important. It's not enough to just wait to watch only one indicator, and then say, "Look, bearish divergence. Let's short." It's not like that. You need to understand the context.

So, this would be bad if we would be fading on the momentum during the third wave, for example. But, during the third wave, you can see the momentum together with the volume was having higher highs, right? So, very healthy price action for me, at least.

Definitely, the bearish divergence for me would be confirmed if we would start crossing the blue line below the red line, okay? That would be a bearish cross, and I would be aware that something like what happened previously back in the beginning of August or like 9th of August might happen again.

However, the context of the market structure right now doesn't suggest anything bearish on the medium time frame, on the 4-hour time frame. Henceforth, I am bullish on the medium time frame, and I'm looking forward have completed the the fifth wave that might take us towards $69,000.

So, I'm bullish more bullish on the 4-hour time frame. However, if you will start reclaiming the $62,500 key level that I told you about, there is a high probability that we will start pushing towards that 61-59,000, right? And I will be waiting for confirmations, and I will be looking forward not to panic right here, but to treat it as a buying opportunity, as a longing opportunity, right?

Because that would mean that with the highest probability, this was actually already the fifth wave. The first motive wave structure from the high degree perspective was already finished, and right now we are already in the secondary wave. 61 to 59,000 would be henceforth my longing opportunity in anticipation that I want to catch the third wave, the high degree third wave, all right?

However, right now the probabilities of breaking below the $62,500 is much less. I would say like 10%. Much higher probability is that we will start pushing towards that 69,000 before start pushing towards that 61 to 59,000. So, nothing has changed on the 4-hour time frame for me from swing trading perspective.

$69,000 would be shorting opportunity if I will have enough confirmations right here with target of 61 to 59,000. And at 61 to 59,000 for me this will be a long in opportunity with targets of around 72 but I will I will I will I will kind of stretch it towards the 79,000 anyway.

So, yes. If you are in Paradise Family VIP, you will know exactly in real time if I will decide to take any position in the market or any of our company team traders. In Paradise Family VIP, we are sharing with you our personal trade setups with clear entry and exit targets as you know.

So, if you have been able to secure your seat, you know exactly what we are doing live. And on the 1-hour time frame right now, definitely below resistance. It's not a smart idea to to create some new long positions if you have not been creating long positions right here during the secondary wave confirmation.

Right now, I would wait for the fifth wave that would confirm the bullish structure and then we would have the secondary wave and there will be from low time frame perspective a great buying opportunity on that pullback because the probability of continuation in that previous bullish trend is going to be much higher, right?

So, always buy during pullbacks if you have a confirmation of a bullish structure market structure and always short any pullbacks if you have previous confirmations of a bearish market structure, right? So, it's it's pretty pretty straightforward. So, ladies and gentlemen, I will keep you updated.

Next video will be again on Thursday and until then take care. Trade with a professional trading strategy, focus on risk first, protect your capital before trying to make some profit. Always think defensively first. You know exactly why. Why? Because survival is the key in the trading business.

All right. So, until Thursday, have a great start of the week, and I will see you on Thursday. Cheers. >> [music] >> Clear eyes, work done. No right eye, no rush. No jerk, [music] right time for snap. Clean setup, clean click. Execute like a pro, that's it.

>> [music] >> Clean setup,