The continued strength of the Dollar is putting the bitcoin rally in jeopardy. 4hr chart correlation is around -0.6, while daily is about -0.2 which is fairly weak. Its likely to see the correlation get stronger. Overall bitcoin rallied hard as the dollar weakened, and a dollar rally could do the opposite.
Very Bullish Scenario:
Dollar continues to drop from the resistance area its currently at.
This could propel bitcoin back to retest structure highs and even break it to reach 13.3-13.5k
Medium Bullish scenario
Bitcoin drops to 6.8-7.2k area to form a inverted head and shoulders pattern. Dollar rally then stops at the higher restaince area and drops sharply. Equity markets continue to rally. This would allow bitcoin to continue its strong rally upwards.
Very Bearish Scenario:
Dollar continues to strengthen , and breaks resistance to break out of the downward channel formed
Bitcoin breaks the 10k area and breaks past the 6.8-7.2k area , the last area of strong support. New lows likely to be tested, potentially as low as 1.8-2.5k area. To reach these lows equity markets will need to see a correction of at least 20-25% within a short time frame of 30-50 days.Otherwise its not likely for bitcoin to reach these areas
How to play
Scale in shorts in intervals from 10.2k to 11.2k, average entry of 10.6-10.7k. Trade will use no leverage 20% account balance
Enter in a long with a stoploss at 9.75k. Take profits from 10.6k-11.2-11.3k
Or
Options
Volatility will be extreme within 3-4 months
14k call option expiration December 25th
7k put option expiration December 25th
Based on short term fundamentals being bullish for the dollar given deflationary forces, as well as the risk of the over extended equity markets being at risk of a 20-25% drop, a more bearish bias seems to be the play. Thus I feel it makes sense to have a ratio of 2 puts to every call. A rally from the upward portion of the lower channel with a break of the 10.8-11.3k area would negate the bearish thesis. Bullish thesis can still be intact till 6.8-7.2k. Puts should be taken profit there, and re entered with a strikes of 4k and 12k. Its likely though that premiums will be much higher if the drop is quick, so one can just more put contracts now to avoid hefty premiums later in case the price breaks down.
10.6-11.3k will be a pivotal area to determine the trend.
Feel free to leave your interesting or creative responses below.
Very Bullish Scenario:
Dollar continues to drop from the resistance area its currently at.
This could propel bitcoin back to retest structure highs and even break it to reach 13.3-13.5k
Medium Bullish scenario
Bitcoin drops to 6.8-7.2k area to form a inverted head and shoulders pattern. Dollar rally then stops at the higher restaince area and drops sharply. Equity markets continue to rally. This would allow bitcoin to continue its strong rally upwards.
Very Bearish Scenario:
Dollar continues to strengthen , and breaks resistance to break out of the downward channel formed
Bitcoin breaks the 10k area and breaks past the 6.8-7.2k area , the last area of strong support. New lows likely to be tested, potentially as low as 1.8-2.5k area. To reach these lows equity markets will need to see a correction of at least 20-25% within a short time frame of 30-50 days.Otherwise its not likely for bitcoin to reach these areas
How to play
Scale in shorts in intervals from 10.2k to 11.2k, average entry of 10.6-10.7k. Trade will use no leverage 20% account balance
Enter in a long with a stoploss at 9.75k. Take profits from 10.6k-11.2-11.3k
Or
Options
Volatility will be extreme within 3-4 months
14k call option expiration December 25th
7k put option expiration December 25th
Based on short term fundamentals being bullish for the dollar given deflationary forces, as well as the risk of the over extended equity markets being at risk of a 20-25% drop, a more bearish bias seems to be the play. Thus I feel it makes sense to have a ratio of 2 puts to every call. A rally from the upward portion of the lower channel with a break of the 10.8-11.3k area would negate the bearish thesis. Bullish thesis can still be intact till 6.8-7.2k. Puts should be taken profit there, and re entered with a strikes of 4k and 12k. Its likely though that premiums will be much higher if the drop is quick, so one can just more put contracts now to avoid hefty premiums later in case the price breaks down.
10.6-11.3k will be a pivotal area to determine the trend.
Feel free to leave your interesting or creative responses below.
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