What's up folks! I am new to steem but I love the platform and want to contribute in any way I can. So I thought I would make my first post a bitcoin price action and orderflow review. But first, an introduction. I am a futures trader by trade but a crypto investor and enthusiast. I traded the ES, RTY and now mainly trade the XBT. I wanted to give some different insights and visuals into bitcoin. None of this should be seen as advise or a prediction and is merely a review and discussion. So lets get started!
I will be referencing the GDAX exchange as well as the XBT bitcoin cboe futures contract. I am using Bookmap, and InvestorRT as my software!
Lets begin by reviewing the weekend price action on GDAX, using Bookmap to visualize the market. This chart begins friday night and goes into Sunday morning at the time of this post, 10:00am est.
We can see the areas of high and low liquidity using the bookmap software. The bright yellow areas are areas where many buyer or sellers have places limit orders awaiting a fill. These areas act as support and resistance to the market as the market orders will have more trouble moving through these areas. We can see that as the market approached 9500 it was met with significant sellers. The buyers were unable to push through. Lets examine this area more closely.
So here we have zoomed in on the market form about 9am to 11am on Feb 3. We can see the sellers stepping in and stopping the move up. Far more resistance from sellers above than support from buyers below. After this first attempt the market was exhausted back down to lower levels before a retest. lets take a look at the second test of 9500 in more detail.
Here we can see both tests zoomed out.
A closer view of the second collision, note that this time we actually hit 9500, suggesting more aggressive buyers but once again unable to push through the sellers that had lined up.
Closer still you can see how many sellers were lined up at 9500 on the COB to the right, the "Current Order Book", and you can see the buyers did little to push through on the second test. Buyers fail here and the market pushes down.
You can see as we approach lower prices the buyers start to show more interest and put in more support around 9000, 8800, and finally 8500 where we are now. 8500 has been historically a significant support level. My bias is that we still have lower to go possibly testing 5000 or 4500 but this remains to be seen. Lets now explore some longer term trends to see where we could be heading. For this I will be looking at 2018 using the XBT bitcoin futures. This is because it is what I trade and what I have the data for in InvestorRT.
Here we are looking at the weekly TPO and Volume Profile to the left and to the right are daily Profiles with composite Profiles behind as well. What I want to point out is the change from a market that had found balance, dropped, found balance around 11200 and was stable, to a seemingly down trending market. Notice how the composite profiles and the weekly profiles show strong consensus on price which can be seen by the large organized volume at certain prices on the profiles. I have marked them with red drawings to make it easier to see. Notice how on the week of 1/28, unlike in previous weeks we see little to no consensus on price. We see a profile with many bumps and one that is very long. This shows us that as the market pushes lower, it is unable to find significant buyers to support the market and find balance, so we continue lower. I feel again that we have further down to go but that is simply my bias and should not be taken as advice!
Hope you all enjoyed by insights and please give me feedback to improve my posting as this is new to me, but I want to give any knowledge I can to the Steem community!