The engineer Iván Paz, CEO of Trading Different, shared with Cointelegraph en Español an analysis regarding the price of Bitcoin. Among other things, he referred to the versions that say that the price of BTC has not yet bottomed out.
“Surely you have seen many market analysts ensure that Bitcoin has not yet bottomed, projecting new lows in the areas of USD 12,000, USD 10,000 and up to USD 6,000. But, what foundations exist behind those analyses?” asked Iván Paz.
Then he asked another important question: Can we really just rely on line plots on a graph? Can we make investment decisions based on supposed historical supports? So how would they explain this new support at $18,000, which had never been there?
“As a result of these questions, they will be realizing that there are too many uncertainties to risk our capital. However, this is typical of the financial markets and much more so in the crypto markets. There is nothing guaranteed, no investment, no market movement, absolutely none of that has 100% certainty”, she expressed emphatically.
“That is why the best investments and trading strategies are based on real probabilities, that is, they are measured and studied based on important statistical samples. This is work that every investment professional does before entering the market,” he added..
And then he indicated: “At Trading Different, we carry out this type of work based on quantitative trading, both for the development of our own indicators and for the assembly of trading strategies. Each of our trading systems is backtested and evaluated, considering mathematical and probability metrics.”
“Based on this, we can explain with fundamentals why there is a 70% probability that the price will seek a new low, but it will not be at USD 12,000, much less at USD 6,000,” he specified.
In the following chart, you can see how Pools are being formed at the bottom of the price: Liquidation Zones.
“In this case it is about all the 5x leveraged that are positioned long in the market, where there are accumulated more than 3 billion USD that could be liquidated. This is enough liquidity to complete a stage of accumulation by the large operators in the medium term (months)”, affirmed Iván Paz.
“The Pools come to form a Settlement Zone up to approximately USD 15,200. Therefore, this would be an area of possible pause and rebound in the price, in the event of a new fall. This does not imply that an operator should go short or that the price will go down yes or yes, remember that we are only talking about a 70% chance. There is a 30% chance that it will not happen (and this can happen). This type of information, which is statistically based, must be combined with the trading systems of each operator”, remarked the CEO of Trading Different.
“In short, we are now truly understanding why the price could go down, what its probability is and how far it could go, based on real market manipulation fundamentals and hard liquidity data,” he said.
Finally, he recalled that “Liquidity Pools are price zones, which indicate, through a mathematical algorithm, where all traders who enter the market over-leveraged could lose. This algorithm developed by the Trading Different team shows us where the price would most likely go, forced by high-frequency bots. These high-frequency bots take advantage of market failures, force the price in one direction and use Stop Loss zones and Liquidation Points to be able to close out their high-volume winning positions.”
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
It may interest you:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.