Right now on the 4H timeframe we have REJECTED the 4H SMA after price REJECTED the Daily SMA late on Sunday evening. This makes CONSOLIDATION unlikely as multiple rejections will force the price LOWER without SUPPORT at $83.6K and $84.3K. As I’m writing this $82.5K is also a fairly important Fib Pivot that will ultimately decide whether another move to the levels above can be made. The 4H candle I am writing this from will be closed by the time I’m done recording the YouTube video so I’ll give my thoughts on it more there. It’s just as likely the price wants that RETEST of $83.6K before getting CONFIRMATION of a further downtrend. It may be that price is more curious about $80.3K than it is $87.3K at the moment - which makes the next few days crucial to watch.

That means we have to keep in mind both the short term REJECTION of Price Discovery AND the reality that we are entering the stage of the cycle where continuing to Short is a fool’s errand. From an investing perspective you already know my opinion - continue to buy Bitcoin over time and don’t sell it unless it dramatically increases the quality of your life. But from a trading perspective we have to acknowledge the path to higher highs will take several months not simply days or weeks. In the interim I see no reason why won’t at least want confirmation of $80K as SUPPORT and it’s not favorable over the course of the next few days or weeks that price has REJECTED the Daily SMA.

I have entered a Short as of the time of my writing this at around $82.5K. Not the best entry - I was late to my own signal because of sleep. Such is life. I am prepared to hop out of this if I need to but I don’t that Daily SMA rejection is something we can ignore over the next few days. Maybe it resolves within 7-10 days but at least for the next 2-4 I’d expect there’s more pressure to the downside without some massively favorable outcome on the inflation data coming out Wednesday (and I think Kevin Warsh is speaking Thursday). I mostly think about it from the simple fact that we’ve REJECTED Price Discovery multiple times now and price is ALWAYS sensitive when that happens even if it’s just a temporary trend.

I don’t think the major move comes until structural collapse of either the Stock or Bond market - I say that all the time on YouTube. Meaning the swings we see now will be LESS VOLATILE than the wonderful trades we’ve received all year. I don’t expect we’ll be snapping to $50K ever again unless there’s a collapse in those other markets. But we can’t trade the 4H chart based on that so we have to accept the setups that do exist and those are rangebound at the moment. I still believe that while the price is stuck BELOW $86K that puts pressure on a $76.3K RETEST - but I have no clue how long that will take if it does indeed occur. Inflation data could be favorable enough to let risk assets fly - who knows, not me.

I think breaking BELOW $83K was fairly significant given the shape of the rise toward $87.4K in the first place. Losing SUPPORT there makes it more possible for another RETEST of $80.3K but it’s quite possible the price learned what it needed to in that range and it’s ready to mount another move toward $84.3K - I just think it already got REJECTED off that this morning so maybe it’s not ready to mount another move today vs sometime later on this week after confirming SUPPORT at $82.5K. Either way I’m happy to close that Short and go Long if necessary - it’s just not looking like that while we’re stuck BELOW that $84.3K level.

Whether or not the price can RECLAIM ABOVE $84K is all that matters now as the Daily SMA continues to slope down from that $84.3K level I mentioned. This is not necessarily a guarantee that price will collapse as it’s often quite common to see chop around this interaction rather than a clean break in one direction or the other. But subscribers are already aware we can spend multiple weeks disconnected from the Daily SMA once we’ve seen a break. Which would just result in the RETESTING of the body of the September candle until we get CONFIRMATION of SUPPORT at the open of $78.6K. This is why I’ve entered a Short just in case this is what the price actually needs CONFIRMATION of given we’ve already seen $81K contested as SUPPORT.

I think it’s worth noting as well that the $81.9K Fib pivot will at least need to be RETESTED as SUPPORT and today’s Daily candle looks highly likely to close well BELOW the Daily SMA (unless a massive amount of volume shows up after Wall St comes back from their lunch breaks). Structurally the Daily timeframe looks like it’s opening up to the downside and it’s just a matter of whether or not $81.9K and $82.5K have enough sway to hold as SUPPORT - and that’s not supported by what the Anchored Volume Profile tells us about the chart. As I’m writing this the price is seeing a more significant move toward the 15 minute SMA that will clue me into whether I’m way too early for this Short or just incorrect on it - but assuming a REJECTION there I was simply early. It’s not impossible for price to mount a full REVERSAL here toward the open but any close today BELOW $83.7K is not favorable for price moving forward.

There remains the possibility that the candle making the bulk of that move today allows for a Daily SMA RETEST in the overnight session but it’s under the exact same pressure then to form SUPPORT instead of RESISTANCE and nothing will have fundamentally changed outside of the inflation data this week. A REJECTION of Price Discovery can’t be ignored so now we just wait.

Usually when price breaks BELOW the Daily SMA it needs a few days to make sure regardless of whether it keeps going LOWER or RECOVERS. If it recovers then I’ll take my Loss on the Short and simply wait for CONFIRMATION that we’re going to mount a move HIGHER than $84.3K (which can still totally get REJECTED at $86K and $87.4K). If it does then we would expect the price to continue chopping at $82.5K and $81.9K until they’re both found to be RESISTANCE instead of SUPPORT. I also think it’s just as possible that broader move toward $76.3K I explained above is as likely to form SUPPORT as RESISTANCE. So once again - Shorts in this trading regime are meant to be temporary not forever.

I’ll be keeping my eyes on the Daily SMA this week - I would imagine it continues to trend LOWER toward $83.6K by the time we mount a move HIGHER than it unless it reclaims ABOVE today or tomorrow. Oh good that 15 minute SMA is starting to REJECT. Structurally watch $83K and $83.6K as I mentioned before - these levels are the middle of the range we’re stuck in now. With price either wanting CONFIRMATION of RESISTANCE at $84.3K (and $86K) or SUPPORT ABOVE $80K (and the distant $76.3K). I don’t really have a bias either way. I think the Stock market is delusional and the Bond market is showing rates that haven’t been this high since I was a child in the 90s. Something will break and Bitcoin will not be immune to that drop in the short term - and it is exactly what will catapult the price much HIGHER in the long term.

Structurally the Weekly is in a bit of trouble despite the overwhelming BULLISH signal that we’ve seen now that price has tagged the Upper Bollinger Band. But it’s too early in this progression for us to know what type of regime we’re in - I go over this in most YouTube videos on the Weekly timeframe. Briefly, that means we are just as likely to continue tagging the Upper Bollinger Band as we are to RETEST the Weekly SMA - that’s the difference between RETESTING $89.7K and $71.6K - obviously quite a dramatic swing to each. All that really prevents the move to the Weekly SMA is the Middle Band of the Downtrend AVWAP at $79.6K but subscribers are already aware - that’s a magnetic force not necessarily a concrete wall. So I’d be looking at the September monthly open at $78.6K as the last real solid force if we cannot reclaim ABOVE $83K for multiple consecutive 4H and Daily candle closes.

If the price struggles to get back ABOVE $84.3K on the Weekly that will maintain downside pressure on shape of the pattern. I think those $79.6K and $78.6K levels are just as likely over the rest of October than another RETEST ABOVE $86K - possibly considerably more likely as long as we stay BELOW the Daily SMA and it continues to slope downward as well. I don’t want to dismiss the fact that we’ve tagged the Upper Bollinger Band but again we have just as much historical context for a REJECTION there back to the Weekly SMA as we do for context of it remaining connected to the bands. However the 2019 and 2015 moves staying connected to the band were off significant WEAKNESS that ultimately formed a dramatic move higher. We have not seen that now.

This email has taken me so long to write that I am now back in profit on that Short. Generally I think it’s a very big deal that we’ve REJECTED $87.4K and $87K so many times - the price did not react favorably to that and for me if we were going to get another bounce HIGHER it would have been reflected by SUPPORT at $84.3K instead of RESISTANCE. Now it’s always possible we spend the next few weeks building SUPPORT below there but ultimately now that we’ve tagged $80.3K the price is going to want CONFIRMATION that it doesn’t need LOWER. And again I’m the only one on the internet that will tell you this but while we are BELOW $86K it just statistically more likely that price wants $76.3K than it is to want $96K. Regardless of your feelings on it.

I do think rising Bond yields will eventually put pressure on risk assets like Bitcoin that do not generate income directly. This is perfectly fine for those of us confident enough to trade the price action - but for everyone else they need to maintain conviction while the price heads back in the direction of $76.3K via $79.6K and $78.6K. I don’t care what it does at that time - I will simply adjust my behavior accordingly to the chart. It is hard for me to believe there will not be a major Stock index pullback but that could happen next year and therefore extend the possibility of Bitcoin consolidating around these levels rather than a collapse lower. I am not at this time expecting to see BELOW $57.7K unless the broader markets collapse - otherwise I think a bounce at the Weekly SMA is likely.

You cannot find an instance on the chart in a Bear Market of a Monthly SMA RETEST quite like this one - I cover that in more detail in today’s YouTube video. Usually a RECONNECTION after 8-15 months results in UPSIDE momentum - whether after some chop or after a massive upside move that ultimately needs to sell off. We do not know which one we’ll receive yet but what we do have CONFIRMATION of so far is TWO Monthly SMA REJECTIONS between the end of last month and the start of this month. That’s not BULLISH. We don’t have any context for the price behaving that way which to me signals CONSOLIDATION here being the more likely candidate and any significant chop BELOW would be temporary and not indication of that $50K move. Without market collapse I just don’t think it’s reasonable to assume that vs paying attention to the bodies of the August and September candles.

That means again we have to pay attention to how price behaves at $78.6K if it does indeed get pulled down there as well as $62.8K for August if you can believe. Now me personally I think we’ll find ACCEPTANCE of the Weekly SMA well ABOVE that level but we’ve got to pay attention to those candle bodies. The only thing really preventing that descent would be $76.3K and we don’t know what the price of the Weekly SMA will be when we interact with it - if it’s LOWER than $76.3K that’s not great for SUPPORT and if it’s HIGHER than $76.3K by the time we hit that level then it’s quite BULLISH for SUPPORT. Once again I don’t really care which one it is I’m just going to move based on reality.

History tells us we only get 3-4 Green Monthly candles in a Bear Market year and we’ve now printed 5. So to me that makes more Red candles still statistically more likely - but we’ve already seen a major paradigm shift and it’s just as possible that we continue to print them if we can reclaim that $86K midpoint. For my own portfolio’s sake I hope that we see this break back toward $82K find some RESISTANCE but really it all comes down to that Daily SMA - if it gets pulled down LOWER than $84K and we reclaim back ABOVE it then we’ve got to accept price is ready to mount another move to $86K. But ultimately that time it looks ugly.

The broader context is 6 months from now the price is likely much higher than it is now (unless we break $100K within 3 months instead of 6) meaning Shorts like the one I’m taking now need to be taken with extreme caution. And really unless we get a move to $76.3K or LOWER there’s hardly any reason to be doing anything other than compounding Longs right now and lowering your cost basis as price fights against it. I would assume we see some chop the next few months rather than a massive pump past $87.4K just based off the WEAKNESS at the Monthly SMA RETEST - every other time on the chart including 2023 was a much stronger initial reaction so the one we just saw looks like RESISTANCE. Only time will tell and I’ll keep you updated as it looks like it changes.

The beauty of Bitcoin is the math not just the money. If you can be patient in learning the math then the money takes care of itself.