Bitcoin’s Trap Zone: Why Most Traders Are About to Get Chopped

こんにちは皆様. Today we're going to take a look at Bitcoin again. Yesterday we had a perfect, perfect call except for a tiny little minor hiccup, but I'm going to explain that in a bit. So as of the time that I was recording the video yesterday, it was like quite around here, and I marked out this change in state of delivery right here, which ended up happening quite literally like five minutes after I finished recording the video, and ultimately price started heading lower. So this was a pretty clean setup. Only problem with this was the fact that my target was over here, and price decided to just hey you know. Let's not do what we're supposed to do, and hey, let's not follow protocol and just stop and create relatively equal lows right there. And that was a bit of a hiccup. It's unfortunate, but we were pretty much right on the direction. Target just didn't get hit. But then, if you guys remember the second scenario that I talked about yesterday, because of how volatile the Asia session was, I was anticipating first of all for there to be not much volatility remaining towards the downside. Right? I was saying that maybe, maybe you might hit this target. But chances are expect volatility to kind of die off. And what I was kind of anticipating is that during the New York session, you may sweep the low. And if you remember, one of the things that I was anticipating is that you could have a New York reversal. It's not a very common type of profile because most of the time it's Asia accumulation, London manipulation, and New York distribution. But yesterday we ended up getting a New York reversal setup instead. And if you guys also recall, I kind of pointed out this order block right here, and I was thing that if you manage to close above this order block, you retrace, that would be an opportunity for you to perhaps dive into a long during the New York session. So both of these scenarios were pretty much called like perfectly. And so that's going to put us up to 54 out of 67. I know that there was a tiny minor hiccup here. I am addressing it. This was not something that I could have anticipated. It's just like how like one of the reasons why I've been hesitating to make a video today is because price has yet again formed relatively equal highs here while leaving behind relatively equal lows. So I don't really know what to think about this. It's just price is kind of setting up for the next move. And these are market conditions that tend to screw a lot of people up because they're going long at the wrong places, they're going short at the wrong places, and usually they find themselves diddling in the middle where, you know, there's no clear direction. And at the moment, this is what Bitcoin is seeming like at the moment. But don't worry, I'm gonna give you guys the playbook on how to play this, just like how we managed to make a lot of profit, or rather not lose money during this entire choppy period here on Bitcoin because we applied these same frameworks. So without any further ado, let's dive right into it. Starting things off on the weekly chart, you can see that the fair value gap that I drew out from yesterday has not yet been filled. But what's interesting is that the buyers— just remember that the trend is overall to the upside. I was anticipating this fair value gap to be filled because if you do fill it, then it will give price a really good reason to just start going up again. But regardless of that, one thing you need to understand about the Power of 3 setup that I gave you yesterday is that Power of 3 means that if this is the weekly open, any price below the weekly open is going to be a discount price for you to get in so that you can ride the expansion upwards and then maybe the week closes Like this, right? So kind of something like this, and that's what we're anticipating for this week's candle to form. Now, how low it gets is kind of tougher to anticipate. What's most important is that we understand what is the behavior of price doing and how this lines up with our higher time frame. And in this case, the higher time frame, whatever's happening right now, this bounce is fully anticipated. Even yesterday, I was talking about how this could be a scenario. Just I wasn't expecting price to just bounce from straight on here without filling in the fair value gap. At least this is on the weekly chart. We'll see if the lower time frames also confirm this. Sentiment. So yesterday we had a pretty deep liquidity sweep, but ultimately price bounced back. But overall still closed bearish, which means that the daily bias for today technically should be bearish. But based on how price is kind of setting up today, today may end up just being another inside bar. Now what does that mean? Essentially because of how big yesterday's candle was, today you might just end up you know not sweeping the high and not sweeping the low. Basically what happened with this candle right here, right? It's a really big candle, and so the next day was really choppy and followed by. even one more day of really choppy price action. So all in all, what I'm giving, like the information that I'm trying to tell you guys is that current market conditions is not something that is going to seem very volatile. And traders, we thrive off of volatility because without volatility, price is just doing nothing. There is very little that we can do as traders. Whereas when the market is volatile, whether it be going up or down, that is when traders make the most money. Investors as well, of course, but investors usually make money in one direction, which is up. So taking a look at news, I kind of mentioned this yesterday as well. It's that we do not have much news this entire week, right? Basically only Thursday at 9:45 AM. That's it. Throughout the rest of this week, we do not have USD news, which is very rare. Like if you guys follow the news at all, you know that most weeks you tend to at least get, you know, 2 to 3 days of USD news. Now, why is this important? I like to always explain it in this way. At any moment when you're looking at charts, there are always 3 variables, right? 1, 2, 3. 1 is what is the direction of price? Is it going to go up? Is it going to go down? Number 2 is how far up is it going to go or how low can it go? And number 3 is the timing. It's basically predicting when these moves will happen. And the benefit of news is that it kind of removes the 3rd variable in the sense that you know for a fact that volatility is very likely going to pick up at 9:45 AM on a Thursday. So then your remaining job just becomes to try to determine what is the direction and how far price is going to go. When you have a week with very little news, in this case we only have one piece of news, it can be really tough to trade this because price is just going to end up chopping around like what we're seeing right now, where, you know, the low that was supposed to get taken does not get taken, high that was supposed to get taken does not get taken, and overall price is still just sitting within a range. Which brings me on to my next point, and very important point, which is the fact that right now we have identified that price is sitting in a range. With these relatively equal highs and these relatively equal lows means that currently you're in a range. And here's the thing about ranges. Most people struggle in ranges, not because they don't know how to trade ranges. It's more like people are just not aware that they are in a range. Essentially, they will anticipate trending price action when price is in reality just chopping around. And so they set their target really far, or they take trades as though price was trending. But in reality, again, the market condition is consolidating. And so that's what gets a lot of people. So just by identifying that we are in a range, we can prevent a lot of the problems that come with trading ranges. And one of the golden rules, in fact, the golden rule of trading ranges is that your opportunities are going to uniquely lie above the range high and below the range low. Okay. Which means that Anywhere in the middle is going to be lower probability compared to if you wait for a sweep of either the high or the low. And I know some of you are a really big fan of the concept of like premium discount, right? Where you draw a range and anything above the 0.5 is a premium and anything below the 0.5 is a discount. But it's different for the range because you are in consolidating market conditions. Most down moves start after a sweep of the range high and most up moves start after a sweep of the range lows, which means your premium is actually above the range highs, in this case above $107,000, and your discount is below $102,000 at the range lows. It is not going to be when price retraces into this fair value gap or whatever order block. As long as you're in a range, chances are you stay in a range. Now, of course, I could be completely wrong here, but the key here is that chances are that you stay in a range, just like what price has been doing so far. That's a range high, that's a range low. After price swept the range high, boom, you head down lower to start sweeping some sell-side liquidity. Now, I was anticipating again that price would sweep Some lower liquidity, and yet price just kind of stops here and screws around. It's the similar thing last week where we identified that we were in range, and I was anticipating this low to get swept, but like price just stops there for some reason. Not something I can anticipate, but at least I'm telling you guys the conditions that we're at and what to anticipate. I think that's the key job that I'm doing here. And so with all of that said, that is your higher time frame kind of like market condition that you are in right now. And so let's go into the lower time frame to see how we can play this. Yesterday's daily candle closed bearish, which means today we should technically be bearish. But let's see if there's any price action to kind of support that. So currently price is at this bearish order block at the moment, which means that when you do retrace into this sometime during the New York session, you can have an opportunity to ride this lower. Okay. Especially considering the fact that you are at range highs. Again, you haven't swept out the range highs yet, which means I would not honestly recommend you guys to take any trades today, at least until these highs and lows have been swept. Right. At that point, you will have opportunities. Getting into a trade right here would put you at risk of just getting swept out because those are relatively Equal highs, and they tend to be a magnet for price, which means you can get in here, price might do a little bit of a movement just to show you that, eh, you know, you're actually right, and then boom, right? You're going to get swept out, and then price is going to reverse the other way. If you have ever been in a situation like this where you got the direction right, but then you kind of like got stopped out, just barely stopped out before the price started moving in the direction that you already knew was going to happen, chances are this is the reason why. You were getting in too early, especially before these range highs and range lows have been swept, which means my advice for you guys is to wait until, you know, range highs or lows get swept. But for the ones that are eager to get into a trade, then this would be a potential setup. Now let's see if we can confirm this on the lower timeframe though. And taking a look right now, London has broken down below the Asia low. Currently it's coming up to potentially retrace to some kind of key area. But for now, let's draw out this bearish order block right here, which means that sometime during the New York, if you start seeing price break down lower from this, then this will validate that setup that I was talking about. Word of caution that I would like to give you guys is that when it comes to trading, it's very important to take into account what the environment is doing. Just to explain to you guys, I was making this board just now, but essentially this is called systems theory. You have your input, right? This is the analyses that you do. Once you have the analysis, this is what I'm giving you guys, by the way, and I'm also giving you guys the process. So once you have your analysis done, the process is how you take that information on the analysis to turn it into a trade. And the output is the result of the trade, right? Did you win or did you lose? And how many are risk to reward did you get out of it? Now, here's the thing, right? Everything is kind of underpinned by the environment. Now, and the environment is not something that you can control, but you can account for it. And that's the key word. We cannot control the fact that we are in a range right now. We can pray or wish or hope for, you know, trending market conditions or just better market conditions, but we cannot, right? It's out of our control. The only things we can control is the input and the process. And for the environment, we can account for it. And so how do we account for this? Understanding that we are in ranging market conditions and the fact that we have relatively equal highs here means that this trade, right, whatever idea that I just gave you, has a pretty decent risk of just, you know, completely getting invalidated and price will actually go sweep out highs. And so if you do decide to take any trades based on these recommendations today, lower down your risk. It's good to take lower risk when your market conditions aren't super favorable to your system. I think this is something that a lot of people struggle with. Regardless of, you know, rain or shine or cloudy or really windy weather or whatever, they always use 1% risk or like 0.5% risk. Heck, some people even increase their risk in uncertain market conditions thinking that this is a smart move to do. Usually the rationale goes like this. Oh yeah, we're in a range. I can see that price is very choppy. And so in order to achieve the same amount of reward, I will need to up or double or triple my risk because the movement is not very big. And so I need to up my risk. This is obviously a stupid thing to do. If you're gonna be anticipating the fact that price is not gonna move much, That is already the biggest signal that this is choppy market conditions. And the correct thing to do in uncertain market conditions is to lower your risk, not to increase it. That will be the bearish setup. Now, don't get me wrong, it doesn't have to be this order block right here, because if you take a look at the 1-hourly chart, this order block does not show up. But what does show up is this one right here, or potentially even this one right here. So right now, there are 2 ways this could play out. One is that this lines up with this overall order block right here, and the second one is that price will retrace to this order block right here. So the key levels that you want to look at is 105,700 and 105,400. Price could get rejected off of any one of these. And the key thing you want to look for is 5-minute order flow to also confirm this. It's kind of the reason yesterday, right? You would not understand, right? You would not be able to anticipate price is going to give you this kind of a reversal until this block is traded above and the price retraces, forms a higher low, and then boom, right? That's the exact condition that I, that I gave you guys yesterday. Same thing here. You will not know if price is going to start breaking down until you get a change in state of delivery. And then boom, boom, price breaks down. And the target for today is— oh, actually, let's take a look at what's the target for today on the 1-hourly chart. Yeah, probably this one right here. This is the start of the overall fair value gap. And so trade for today might just be, if you're going short, you know, it's going to look something like this. 4-hour trade, even if your risk or even if your entry is like wider, still going to be an easy 2-hour opportunity. And that is towards the downside. Just understand that today, because of how volatile yesterday's candle was, unless you start heading up from this point onwards, price is not going to be very volatile and to Just lower down your risk, anticipate the fact that you will need to exit your trades sooner than usual, and that is something that we take into account. Now, the second thing to consider is whether or not there is a bullish opportunity here, and the bullish one is going to be also pretty straightforward. Right now, price is within this bullish fair value gap— sorry, bullish order block right now, and we have another potential fair value gap, order block, whatever you want to call it, down here. No, I mean, not whatever you want to call it. This is indeed a fair value gap. So let's mark that out. Right now you're in this bullish order block, which means that if price starts breaking higher, right, the exact condition we want to see is for price to actually break above this block right here. This would confirm a 1-hourly shift in order flow in the sense that— default blue. So if price breaks above here, look for a retracement into here and price is going to start heading higher. This would be the condition for bullishness. Now, some of you may wonder, why am I so like ranting so much and sharing so many different scenarios? That's because this is the job of a trader. It's not necessarily our role to try to predict what the market is going to do next. It's kind of like preparing, like just coming up with multiple scenarios. And ultimately, trading is a game of reading and reacting. Whichever scenario plays out based on the criteria that I've set, then we just kind of read and react, right? Whatever happens, we're already prepared for it. We've already planned for it. And that's kind of the role of a trader. So this is the bullish scenario. Let's go down to the 5-minute just to see if we can confirm this. And indeed we can, because breaking above here would be the 5-minute changes delivery. Breaking above here would be the 1-hourly changes delivery. If you retrace back into here, that gives you a very clear reason to start going Higher. Now that is higher, but so far based on what I'm seeing right now, unless this currently is looking like a London breakout, maybe continuation. But the other way that this could play out is that Asia ends up being accumulation, London ends up being an extended manipulation. Currently this can still be manipulation. The key here is that you want to see price break above here and then boom, that will be basically AMD for those of you who are familiar with the accumulation manipulation distribution type setup. This is still possible. But again, just keep in mind that the daily bias from yesterday is bearish, which means the daily bias today— sorry, because the daily candle yesterday closed bearish, today the daily bias is bearish, which means that if we were to be taking longs, we want to be really cautious, wait for all of the confirmations to be hit, because otherwise we'll be jumping in prematurely without timeframe alignment, which basically means that your daily is, let's say, pointing up, your hourly is pointing up, and your M5 is also pointing up. That is timeframe alignment. That is where most of your A+ trades are going to come from. It's not when, oh, M5 is already bullish, but then the other 2 timeframes are still bearish. That is an example of no timeframe alignment, and that is how you often end up with very subpar trades. If you guys enjoy these analyses from the smart money perspective on crypto, subscribe because I'll be coming to you guys with daily videos. 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