Bitcoin has started to bounce back over the past few days, which severely raises the possibility that a major price low formed this week.
Last week some of Biyond's indicators, especially Biyond Vanguard started to warn that an attack below the $60,000 area was about to come during early-week trading as evidenced below.
Source: Biyond.co
If you read my daily newsletters you will know that I was also looking at the type of reaction around the $58,000 region to determine my next plan.
Given the strong bounce back and lack of daily price close below the mentioned area it will be very important to look for a higher low next week.
Source: Tradingview.com
The playbook is simple for the coming week ahead. A higher low forms and bulls gain momentum above $65,000 then Bitcoin rallies to a new ATH, and then some.
Conversely, we see a new low forming next week and Bitcoin holds below $58,000 on the daily time frame, and then the price crashes towards the $50,000 region for a long-term trend-defining moment.
Source: Tradingview.com
Today I did not want to spend too much time on the technicals, but rather on what exactly Biyond's indicators are detecting and if we can garner any clues from them.
Starting with the Long Vs Short ratio, and this indicator saw some epic price movement last week as Bitcoin fell then rose.
Source: Biyond.co
The indicator went above traders going Long by a margin of 3:1 and has since crashed down to nearly 1:1.
This tells me that if traders start to pile in Short next week (i.e the indicator turns Red), but no new low forms, then this could be a top leading indicator of a coming Short squeeze and a new leg higher beginning.
Source: Biyond.co
Looking at Biyond Atlas and the indicator has not turned yet. However, we are very close to the sweet spot for being oversold.
Should we see the price dropping marginally next week but this indicator creeping into the Grey zone then it could be a powerful "bottoming out signal".
Source: Biyond.co
And finally, we come to Biyond Vanguard. This indicator briefly turned red this week across the Weekly time frame.
The bounce back has subsequently turned many time frames Green again, however, the weekly is still on Amber alert.
Source: Tradingview.com
Notably, the Crypto Total Market Cap turned exclusively Red this week, but the rebound has really changed things for Vanguard going into next week.
Out of all of our indicators, I would suggest keeping a close watch on the Long Vs Short ratio next week.
Failure to create a new low and this metric turning wholesale Short would provide a very compelling case to go Long for a minimum of $90,000.
