Video Transcript:
Hello everyone, it’s Dale here. In today’s video, I’d like to talk about Bitcoin. The reason is that Bitcoin has been dropping like crazy, and a lot of traders are wondering where Bitcoin will go and what to expect. If I look at the chart and use Volume Profile, I would say that it’s pretty straightforward because Volume Profile very clearly shows the strongest support and resistance levels.
So, let’s take a look at the chart, and let me show you. What you see before you is the daily chart of Bitcoin. This is the big picture, and as you can see, from the all-time high here, Bitcoin experienced quite a significant sell-off and is currently dropping. Right now, I don’t really see any strong support that would stand in the way of this strong sell-off. Let me use Volume Profile and show you what could actually stop the sell-off of Bitcoin.
All right, so what I’m going to do is apply Volume Profile over this whole area to see the volume distribution. As you can see, there was this massive volume zone from which strong buying activity started. This heavy volume zone is a place where buyers were active, building up their long positions, and from this rotation, they pushed the price aggressively upwards. The beginning of that heavy volume zone is roughly here, and this is also where strong support is. When the price hits this level, all those traders will want to buy cheap again because this was a liquidity zone in the past. This whole area was a place where a lot of people were willing to trade Bitcoin because it was a price range where many found Bitcoin’s price fair.
All the big players now know that this is a place where they’ll be able to buy cheap again—way cheaper than before. That’s why Bitcoin is dropping. The big players are pushing the price down because they want to buy cheap again. So, they’ll probably want to push Bitcoin’s price down to this heavy volume zone and buy again. And what happens when they buy again? The price will go up.
Now, this may not be a scenario that plays out in just a few days. We may need to wait a bit, but this is a very likely scenario. This is the strongest support in the way right now. The way I see it, Bitcoin is just free-falling—there’s nothing really stopping it. I don’t see any strong support, and I don’t see any reason why Bitcoin should stop this sell-off. That’s why I think it will continue to drop until it reaches the beginning of this heavy volume zone, which is around 7,000, and that’s where I expect the price to react.
Now, obviously, this support is not just one level—support zones are broader areas. So, it’s not just one specific price but rather a whole zone where heavy volumes were traded in the past. This entire area is a support zone. In my experience, the price is likely to react at the beginning of the support zone, but in reality, it can react anywhere within that zone. So, you need to consider that as well when placing your stop-loss. You want to place your stop-loss beyond the support zone, which in this case would be somewhere around here. The price shouldn’t go past this zone. If it does, then it’s better to take the stop-loss.
Now, let’s talk about resistance because there is also a strong resistance forming on Bitcoin, and let me show you where it is. Again, I’m going to use Volume Profile here, and in this case, I’m analyzing how the volumes were distributed in this rotation before the sell-off started. The beginning of that heavy volume zone is around 95,000, and this is a resistance zone starting at this level. It is likely that when there is a pullback to that level, we will see a reaction.
Again, this is not just one level—we are talking about a resistance zone. It begins at 95,000, but in reality, it covers this entire area. This whole zone acts as resistance. And again, we can see this very clearly using Volume Profile. Volume Profile tells us exactly what’s going on—where volumes were traded, where big institutional traders were active, and where the strong support and resistance zones are.
So, this is the resistance right here, and this is the support. What we need to do now is simply wait for the price to either hit the support and go long from there or hit the resistance and go short from there.
All right, so let’s see how this plays out. Let me know in the comments what you guys think. If you’d like to learn more about Volume Profile trading and trade alongside me every day, I recommend visiting my website, Trader-Dale.com. If you click this button, it will take you to a page where you can browse my trading education and custom-made trading indicators. There’s the Volume Profile Pack, the Order Flow Pack, and the VWAP Pack. You can get them separately or, if you scroll down a bit, you’ll see a discounted combo package that includes them all.
If you’d like to trade alongside me and other prop firm-funded traders every day in a live trading room, click the button labeled “FTA” This will take you to the Funded Trader Academy page. There’s a video you can watch where I explain everything included in the academy. If you’re interested, you can book a one-on-one call, where we will walk you through the service in detail so you can decide whether or not it’s right for you.
That’s about it! Thanks for watching, and I look forward to seeing you next time. Until then, happy trading!
Comments
Post a Comment