Flagging Out
Bitcoin keeps trying to grind higher, but is yet to achieve any serious lift-off the bottom. The concern is this price action is starting to resemble a bear flag, signalling downside risk may be nigh.
G’day Folks,
One of the best things about Bitcoin (for me as an analyst anyway) is how transparent all the data sets are. We have access to countless metrics describing investor activity in spot, onchain, ETF futures, and options markets.
What really kicks ass, is when these market sectors paint a very clean picture of positioning, and we can achieve a high degree of confluence between them.
Confluence is a powerful tool in markets, as it adds much more weight to our analysis and our conclusions. When you get the same story from multiple angles, it tends to stack the odds in your favour.
To my eye, Bitcoin appears to be trading in a bear flag, tempting the bulls to FOMO in around $93k, and then dashing their hopes again and again.
A bear flag does suggest further downside is on the cards, and this is reflected across several of these market sectors. Today’s post is an exploration of this confluence as I see it, marrying up the onchain supply distribution, with the positioning in options markets in particular.
What we’re really interested in, are signs that complete capitulation has taken place, and evidence that the smart money are starting to position for a rebound higher. We’re looking to paint a picture of what a positive inflection point may look like, and to identify the point of maximum fear, so Check the HODLer can take advantage of it!
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