MANIFEST: OMEGA CANDLE
ROUND 4 - OMEGA Candle
If there has ever been a time for bitcoin to print something huge - double digits YUGE, it's going to be around here. Brace yourself for the mortal kombat finisher after a not so flawless victory. I can almost taste us breaking the weekly βbear-doomβ lower high structure and absolutely planting a massive green dildo that can be seen from space, finishing off every last doubter.
There is just one small catch. Those bears are right on the money, we are trending down on higher timeframes. Last week we mentally masturbated about the idea that fed cuts 50bps and everything just full sends βimpaling every bear in a sea of green candlesβ. Sadly this has not really been the case.
The bears we dealing with are some lab grown synthetic giga bears that can endure a lot of pain and dish it out equally proficiently.
As a wise man once said βnothing ever goes up in a straight lineβ - wiseman420, and it couldnt have been more true for the weeks PA. If we have a look at 15min timeframe, there has been relentless buying leading up to the announcement of the 50bps cut. With a brave bybit short seller getting popped regularly throughout the day leading up to j-dogs magic words.
I like watching bybit OI vs price action, somethings in the water there, because these apes regularly oversize and get hunted out just as often. As a good example, here we see a 15min high candle and a corresponding dip in OI, with the ultimate short liquidation candle once the notes got released and the 50bps cut was announced.
When will they learn? hopefully never, because until then its alpha.
If you have traded any bullish sell the news events, there is always a point where buying makes sense. But damn, this FOMC had hands. It was a whipsaw trying to guess the long timeframe direction, I knew we needed a dip before heading higher.
Mentally I figured something deeper around 56k, but once the bid stepped in at 60k - it truly was the last time to buy and the right decision was to simply ape.
My regular readers usually enjoy a lengthy discussion on macro data coming up for the week, but this week we donβt have much to speak of - we still digesting. Sure we have a few odd data points coming out and jpows speech - but generally, it isnt expected to rock the boat too much.
Jerome the butcher
Those who celebrate a 70 something year old man speaking to decide your fate, would have heard that 2 more cuts are expected before the end of the year. This should put us at 4% fed funds just in time for santa claus rally.
4% by end of year still gives a ton of working room for the fed, so a double 50bps cut wouldnt surprise me as they engineer the data to be just a tad weeker than expected. But we still have an entire election until then. So,
The Election
Realistically the next macro risk event IS the nov US election. And its appropriate for us to position our portfolio into that so lets look at what the burgers produced for us as candidates.
Looks like an angry married couple fighting for custody of the kids
Results come out a tad after Nov 5th because the amount of mail in votes and the turbulence we going to have... I can feel the vol tick up already. Consensus is bear queen v king bulla, so its no surprise really that as trump odds dip even with a 50bps BTC is still very sluggish
Polymarkets billion dollar election market still has Kamala as the victor, and no amount of assassination attempts can keep trump from leading. And as trumps odds drift lower, so does the dreams of a BTC solo reversal, everything up to now has just been macro correlation.
We are still far out from the actual election date, but the correlation of trump win odds v market prices will continue to grow as the size of the betting market grows and the outcome of the election becomes clearer.
The weekly swing trader wants to position his portfolio to capture opportunities that can arise from election shenanigans. Long term, it doesnt matter who wins - both are gonna print so much money the dollar debasement will send even the most left curved CTO memecoin so long it still has an iota of attention.
The OMEGA candle
How can it realistically happen, we can look at the 20k breakout of December 2020. Weekly resistance coiling LHs and some grind up to the resistance line
I think it starts here,
Those 64k sells need to cover. Why, because every short term bear is a long term bull. Bitcoin is inevitable, the space will eventually be purged from all fiat maxis, and the ultimate goal should always be to stack sats and get as much coin as possible - I cannot stress this enough.
Ripping through these 64k sells should bring confluence in that the weekly structure is breaking into a new HH, and all we need to do is bull flag before full sending into βuptoberβ after all, if 1st september is sell why couldnt we just send in october. Dont midcurve it.
In a technical sense, trends are still bullish with BTC well above the 200D EMA and SMAs starting to flip green too.
Momentum indicators are providing us with some decent LTF entries
And if we believe in the omega candle, we would want to capitalise on something like a hidden 4hr bull div or just grab something at a local support like 62k
This purple box would please the bears and provide just enough doubt for the bulls to think its over.
You could see it happening too, STF momentum is favouring bears and this liquidation cluster looks juicy.
Saylor was the marginal buyer from 62k, hes been a good contra indicator that swing traders love to fade, so why couldnt we get 62k entries?
I expect to see spot bidders stepping in here progressively as the week matures and prices suppress, there is nothing outside a black swan event to suggest that we insta nuke - so price suppression should be mean reversion.
As we study the orderbook, we gain more insight to that final battleground at 64k.
We got some serious asks building up at 64k, they wouldnt be there if they werent looking to fillβ¦
Options Market
We still have this mega expiry coming up, its ticked up to $6bil at 58k max pain, i think its unlikely that we head down there as we would need to move fast and at that point the value of the vol would make a lot of this put oi up allowing them to close out for profit
You get quite a lot of defensive positioning that looks useful again, and I doubt they hold to expiry unhedged. On the vol side, as promised I got a IV surface plot for you.
With majority of this OI being yield farming up at 90k+ it doesnβt surprise me that the surface is so steep. Vol is still relatively cheap despite the week we had, so I still think vast majority of the OI plays is just defensive yield farming. After all 100k strikes are paying 12% atm, thats risk free money.
Hyper1ons thoughts
We had a huge week, with bulls plowing ahead. The news of saylor being the marginal buyer was bitter sweet, but the ETFs are still piling money in and Larry seems to be super bullish on BTC which brings hope for my spot bags.
I think we are getting closer to fomo season, so Iβd like to hold onto my sub 60k longs I grabbed this month. But, if you didnt get a chance to buy, there might be a great opportunity at 62k - the greatest risk is being sidelined.
For a long entry lets plot that out.
I think this weekend selloff is a feeble attempt, I doubt this dip is particularly deep. 60-62k would be the lowest I see this go, and if we going to hit the omega candle its gonna be running those 64k stops and just FULL SEND to 70k. Leaving you with a decent R:R play.
The background noise is, equities up, gold up... bitcoin up? We have been presented with goldilocks macro, a decent cut - more coming in, and there isnβt anything on the horizon besides and election to win. Hold on, and strike while theres an opportunity.
Manifest the OMEGA CANDLE.
