Transcription
I am going to present to you an indicator that is really cool for finding bullish extensions on Bitcoin, on company stocks, on altcoins, but also the levels at which we are forming local tops, or even cycle bottoms. This indicator, I created it myself, and I am in the process of creating many that are really interesting and that I will publish on TradingView in about a week or two. To register and get access, it's very simple, send an email here to info@tradingpro.tech, and that way, once they are published, if you want them, I can send you an invitation because they will be published here in "indicator" and "invite only." This is where you will be able to find them by registering via email. The platform will open in about a week or two, and that way you will have access to this indicator and all the following ones that I am going to present to you, which are really, really cool. What does this indicator do? It does several things that are really interesting. The first is to show you where the real accumulation levels of what we call LTHs and STHs are. STHs, for short-term holders, are Bitcoin holders who bought Bitcoin less than 155 days ago. LTHs, on the contrary, are those who have held Bitcoin for more than 155 days. The data is available on Glassnode, CoinGlass, and other topical sites. And it displays the average purchase price for these two types of cohorts, as we call them, according to the temporal condition I just stated. The big problem is that these indicators and these averages do not take into account weighting by volume. What I mean by that is that STHs suffer from a single condition. They bought Bitcoin less than 155 days ago. But the question that arises is, did they buy it here, here, here, here, here, or here? It would be naive to think that they bought it every day in massive volume. And it would also be wrong to think that they either had a behavior where they only bought at the top, or a behavior where they only bought at the bottom. And there is information that is quite difficult to find, but which can be found regarding the enormous purchase volume that has been contracted in the last 5 days, and therefore to perform a statistical weighting that will lead to a reality, an approach that will be the best for calculating the purchase cost of STHs. This logic also applies to LTHs. When did they acquire Bitcoin? The only condition is that they acquired it more than 155 days ago. But did they acquire it here, here, here? Or even at the origin of Bitcoin. This is data we don't have, and which we must also weight in relation to trading volumes and massive purchase volumes that have been made for more than 155 days, and to the distributions that have occurred because this concerns only LTHs. This indicator takes all of this into account in its calculation and shows us a weighting that is closest to reality, and which is that currently STHs have an average accumulation cost of $106,000, and LTHs $95,000. And we see that this zone seems to be the right one. Why? Because it imposes a psychological resistance right here every time we reached the price. And it's logical, put yourself in the mindset of an LTH. These people have held Bitcoin for a very long time at an average of $95,000, and they are afraid. They are afraid because here, here, here, and here, they were in latent loss. And so, once they return to break-even, they dump their cryptocurrency. They dump it to at least stay flat and be at break-even, not at a loss. And so, on the spot market, this creates a slight momentary downward pressure while these people sell in panic. We will surely have the same phenomenon once we reach the ST level right here, who will possibly want to dump their crypto at break-even to no longer be at a loss. But be careful, the same phenomenon applies in reverse. Every time we go back above these levels and the STs and LTHs who haven't sold will defend them, it will create support zones as we had here, here, or even earlier in the history of cycles, as you can see. This is the first piece of data. The second piece of data that is hyper interesting is the two red and green channels drawn on the chart, which are derived from an extremely precise calculation based on the average corrections we've had on Bitcoin and the average extension phases on Bitcoin. Throughout BTC's history, we've had bullish extension phases that led to hyper-impulsive movements, and correction phases that also led to extremely strong movements. This indicator precisely calculates the average of extensions and retracements relative to the asset on which the indicator is present. Here on Bitcoin, this results in two channels that evolve and are the extension and correction channels. And you can see that it works very well. In 2021, when we had Bitcoin's extension, this extension, you know, was hyper strong. Why? Because there were all the bullish catalysts, and so it's normal to have seen a price that exceeded this red band. Once we returned to something much more measured, particularly during this cycle, you can see that we've operated a real ping-pong between these two zones. Once we reach the red zone, we reach the green zone, then the red. Once the green, then the red, the green. Here, we almost did it, but not quite, and currently we are in the green zone, which indicates that we have for now reached a local bottom zone on Bitcoin. If we remove this indicator and take another indicator that many people look at, it's the 50-period moving average on Bitcoin. We are on a weekly time frame, and this was a moment that was hyper discussed on social media because many people had noticed something very simple that jumps out at you: the price had bounced off the moving average until now. Here, where we approached it, here we had bounced off it, here as well, and so people thought, "great, a very strong bottom zone." In reality, the moving average is nothing more than the average price over x periods, here 50. It means nothing else. This moving average only calculates the average price. It does not display very important data, such as where the most volume was bought according to these different STH or LTH cohorts. And above all, it gives many false signals. If we take the last bull run right here, you can see that the signals were very mixed. If we only followed this analysis, we entered a market here, we entered a bull run here, we entered a bear market again here, and we entered a bull run during this entire timeline which lasted less than a year, if we relied solely on the MA50. The big problem was that we were passing through it in one direction or the other. If we remove it, however, and take something much more measured like this indicator, you can see that in reality, we were indeed going below the 50-period average, but it was an immense buying opportunity because we were precisely at the bottom of this green channel, which, I remind you, weights volume, and also weights the behavior of LTH and STH investors present in this market, and therefore we had an un-truncated vision, a much more realistic vision of a fair price that was a price that was great to accumulate. And so you can see, we did exactly the same thing. At the beginning of the bull run, we went from a price in the green channel to a price that reached the red channel, then the green, then the red, and then went into a hyper-acceleration phase to continue its journey. In the corrective phase, we came to the bottom of the green channel. You can see here, we even slightly exceeded it. We reached the red. The last extension phase, then we went into a bear market. During a bear market, it's normal. There are no bullish extension phases in the red because we are in a bear market. We could even have had one. Typically here, we could have had a fairly strong bullish extension that would be considered a correction during the bear market. We would have reached this red channel precisely in imbalance, liquidity zones. It could have happened, it didn't, but these would have been super interesting short zones. Then we resumed our little journey as I presented to you. If you are not active in crypto but are active in the traditional market, this indicator also works very well. If we take several publicly traded companies, notably AMD, which is a very good company listed on the Nasdaq, you can see that it's exactly what we've done several times. We've had the bullish extension phase in the red channel, then green, then red, then green, then red, then green, then red again. Since we reached this extension phase, we have been undergoing a corrective phase. Tesla is the same. You can see, we've just been ping-ponging between these extension phases, and this red channel is really a very good zone in which to start placing stop losses and taking profits. The goal is not to say as soon as we touch the red channel, you sell. That's not it. The goal is to say as soon as we are in it, be careful because we can have a corrective phase, and it would be good to place a stop loss. Nvidia, same principle. You can see as soon as we reached the red channel, we had a correction. Red channel, correction, red channel, correction. Then in the green, again in the green, bullish extension, and so on and so forth. It also works on commodities. You can see that on silver, we reached a hyper-acceleration phase. We touched the red channel, correction. We touched it a second time. So, we will enter a zone where there will be strong probabilities of a correction. Cycle top, yes or no, we'll see. But in any case, the goal is not to say that, it's to say that here it's better to take profits, place stop losses, and manage your next entries to perhaps wait for the price to reach the green channel. On silver, we only had this extension phase once, and it was here, and it marked the top phase of the cycle. So we'll see if it happens again or not. We'll finish with altcoins and Total 3, which includes all altcoins except Ethereum. It also excludes Bitcoin. And what you can see on altcoins is that when we put them all together, they follow this same pattern. We are in an extension phase, and as soon as we reach the upper band, we correct, we reach the lower band, we have an extension, we correct, we have an extension, we correct, and for now, we are in this bottom phase here in this green channel, and we are waiting for the next extension zone. So, what is also interesting, and I'll finish with this, is that it's not enough to say, "very well, if we reach a red channel here, we'll gain about 58% to 60%." It's not that simple because, of course, as the price climbs, the channel itself will take an upward direction. What we want to catch is a price extension that is much too strong compared to the evolution of volumes and STH and LTH buyers, a sign that we are entering corrective zones. The price is climbing too strongly compared to the channel, and therefore momentarily we are in a zone that is a hyper-extension zone that will lead to good probabilities of a correction zone. And so, if we do the same movement as we had here, and we do it from now on, we will have a channel that will evolve and take an upward direction, a sign that the price can catch up to the channel, approximately around 85% to 90% on Total 3. So, that's it, I'll stop here for today. If you are interested, you can send an email to info@tradingpro.tech, the email is in the description. I wish you a very good start to the week. We'll see each other on Wednesday for the next video.