Espresso : Bitcoin’s Drop is Your Opportunity
by Ben Lilly
This Breakdown on Bitcoin is a Gift
After nine days of bitcoin trading between $18,600 and $19,700, we have some volatility. During these nine days that started on November 30 prices consolidated into a triangle.
And for the better half of this range, onchain flows were bullish. Liquidity was still flowing into exchanges and reaching new highs was not out of the question.
This all unfolded as traders took profits whenever price approached all-time highs. It’s a normal response in the market as price rarely breaks its prior all-time high on its first go around.
The status quo of good liquidity, bullish onchain flows, and normal levels of profit taking began to shift late on Dec. 7 and early Dec. 8th.
Here were the transactions that Jarvis flagged during this time period.
As these transactions got picked up by Jarvis and paired alongside other metrics and indicators, it took profits on its BAND long position… And moved to the sidelines.
Many of you might ask why it didn’t go ahead and take a short position. It’s a great question that hints at the current environment… Risky. The risk meter for Jarvis is still high. Making the payoff for the amount of risk involved in trade not worth it.
So instead of jumping into a short position with elevated risk levels, it’s apparent Jarvis is waiting for a long entry.
It’s tough to know when Jarvis will begin to scale into a long since it’s the type of thing that isn’t apparent until it is. That’s because this type of reactionary trade is determined from real-time blockchain data. As onchain data begins to indicate bullish activity, Jarvis will hone in on a range using a handful of methods.
Based on the methods we programmed into Jarvis we can expect the areas highlighted in the white support lines and the white box below to be of interest. But by no means definite.
Again, we won’t know if any of these areas of interest hold until the onchain flows turn bullish again.
Keep in mind, outside of the onchain flows there are several bullish indicators. Hashribbons, a long-term swing indicator turned bullish several days ago, exchange reserves are at yearly lows our Jarvis Index is still near its buy range and funding rates are no longer heavily skewed. Each one of these is a bullish reading.
It’s why this drop is best viewed as an opportunity to find longs instead of chasing a high risk / low reward short.
If USDT, USDC, BUSD are re-entering exchanges and various wallets begin moving similar assets into DEXs then traders ought to consider a long.
We hope whales choose DEXs since this type of data is viewed before it happens, giving Jarvis plenty of time to make a move with even greater accuracy.
Stay tuned to our telegram channel if you’d like to see occasional updates regarding onchain flows and metrics.
Your Pulse on Crypto,
B. Lilly
P.s. - If you enjoyed this update, please let us know at askus@jarvis-labs.xyz or send me an email if there’s something you want us to cover in an upcoming Espresso ben.lilly@jarvis-labs.xyz
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