The interesting feature of highly speculative issues such as BTC is that in a very short space of time you were able to observe a large range of maladaptive trader behaviours. I can guarantee that when I initially posted my original chart showing that BTC was in congestion but was also in a volatility squeeze as volatility had collapsed a number of traders instantly took this as a signal that BTC was going to go up. As we can see from the chart below that is not what happened.
But such behaviour demonstrates the issue of optimism bias which is particularly powerful when traders have an existing position within a given instrument it causes traders to only absorb information that supports their existing narrative so they operate under a perpetual cloud of confirmation bias. Any information that operates contrary to their existing belief structure is instantly dismissed. In many ways, BTC is a religion and as such for many of its believers all information that may be pointing to BTC suffering further falls is instantly discounted and somehow rationalised. This contrary information also generates profound ego defensiveness as evidenced by the number of tantrums I have witnessed when I have pointed out that BTC is a Ponzi scheme and is headed down. The chart below is a weekly chart that looks at the longer term history of BTC.
As you can see I have put in place the same congestion lines, you can see there is not much in terms of price support between the current level at $12,000 and beyond that point $10,000. The harsh reality for all of us as traders is that it doesn’t matter what our narrative is the only opinion that matters is the markets. The market is both the ultimate information collation tool and voting machine. The market has collected all the information it needs about BTC and it is cast its vote it has had its say and its vote is that BTC along with other crypto’s I’m taking a hammering. How long this persists is anybody’s guess and I have to stress it is a guess because as with all things to do with trading the future is opaque we do not know what will happen in the future despite the quality of our narrative and despite our emotional attachment to it. There is no way that we can take our point of view and enforce it on the market and no amount of wishful thinking will make BTC at the moment go back to $50,000 where a lot of people got sent.