Bitcoin's Hidden Decision: Reclaim $65,700 or Reject? The Karma Fractal Explained

[00:00:00]Hello guys, welcome to the train parrot.

[00:00:01]I've seen the market for long enough to understand that there are certain patterns that you just cannot ignore.

[00:00:08]Starting with this one that we're going to be talking about today. I have released a video a long time ago where I described this effect as the karma of the markets which in a nutshell implies that everything that happens in the bull market kind of repeats or echoes during the bare market and it can be used as a strong indication of where we could be going next. But hold on the horses.

[00:00:35]Today we are at such a critical crossroad that we could potentially be following perfectly letter by letter the full pattern in this fractal which means that we could be just in a few days away from hitting $49,000.

[00:00:54]We'll pay attention to this. We'll pay due respect to the pattern that has not broken in the past two cycles. And of course, we're going to have a catch up on the shorter time frame and see what's going on with this so far failing breakout on the daily time frame and what it means for the short term while always keeping an eye on this ondevelopment pattern on the weekly and monthly time frame. Definitely a must watch for properly understanding the markets. And yes, we'll look into the leftover of liquidity into the order book and all the things that really are a mustwatch if you want to understand why the market is doing what it's doing.

[00:01:41]Guys, if you like this type of content, make sure that you're subscribed to the channel. Hit the notification bell to get notified every time I put out one of these videos. 500 likes will be fantastic and it's absolutely up to you to help the channel.

[00:01:55]So yesterday we observed that we were getting some QFL signals on the 1 hour time frame that were pretty similar to this event in here that happened in mid July where we were taking the highs breaking the base to the upside and then having a small correction. Well, surprise surprise we produced a base around $65,000 and around the 20 of July we broke out.

[00:02:23]We started with the first initial QFL signal, but that did not stop until we got into $67,000 give or take. Currently, we are producing a bull flag in here. And I'm trying to understand if it's going to have the same effect that we have in here where you get a little bit longer lasting bull flag before you find support and then continue or if we're just going to do a shallow bull flag with continuation to the upside. This is just the analysis of the one hour. There is a few hidden levels in here, particularly the 65 700 that you should definitely take note because it's one of the most important lines in the sand that are going to resonate in the rest of the video. not just for short-term analysis, but also for the long term and for what to expect in what could be an extended rally in a bare market or the beginning of a bull market. Let's continue with the 4hour.

[00:03:28]Let's do the full due diligence to understand where are we in the short term before we start stepping into the psychological map which is currently playing out in a very similar way than in the previous bare market. So definitely this is a mustwatch. So let's continue with the 4our. Yesterday we talked about the formation of a butterfly effect. We talk about this breakout in here and we say that there is a possibility that after the breakout we get a little bit of turmoil in here and currently partially that is what we are getting. We are getting number one the breakout that failed and instead of testing the most bullish support which will have been testing the RSI of 64 we ended up doing a deeper correction on the RSI also breaking down the ascending sloping yellow line in there as you can see. So, we got two things that broke overnight on the 4 hour on the price action that is impossible to perceive because it's currently testing 65700.

[00:04:35]And I repeat that number, you have to write it down in your forehead. If your boss is asking why the hell are you writing that number in your forehead, you just tell them that some psychopath on YouTube told you to do so and you are no longer in control. And let's see.

[00:04:52]Basically, we have that level currently holding the line there on the 4our time frame. But we got in here some insights.

[00:05:00]Two out of three things happened on the 4hour RSI. And I'm saying out of three because the first one is the breakdown of the 64. The second one is the breakdown of this ascending sloping which should have held but we got a shallow breakdown in here at an RSI 56.

[00:05:18]The third that hasn't happened yet, but now is kind of calling for it is the RSI now doing the full journey into the support of 41, which so far has been holding here on the 4hour.

[00:05:31]But you shouldn't be surprised if we need to pay a stop at 41 RSI after having those lost that level. You kind of open the door for that possibility. The RSI of 41 is currently located at $64346.

[00:05:50]Right there, we have a bullish order block that hopefully with the volume peaking here is also going to hold the line in a similar fashion that it already did at the point of control at 62 when we were testing that other level there. At that point, it was an RSI of 37.

[00:06:08]Let's move on to the daily and let's see where we are with the highlight of the day which is the test of the neckline and that potential breakout of the neckline into a technical target of 75.

[00:06:22]Pretty exciting target. It's not a forecast. It's just a recognition of a technical target that is in front of our eyes and that we also understand that if we manage to break out there is an potential area of acceleration here. You have some chunky fair value gaps that gave in the past past speed downside.

[00:06:45]And that tells you something that there is a higher chance than not than if we break out and hold that neckline. The move can also be very impulsive and take you back into over 70s very quickly. Of course, there are levels in between.

[00:07:03]There are some levels of resistance. We have the short-term liquidity still sitting at 69. We know all of that, but we have massive imbalances that always, not always, most of the time contribute oil in the pan for fast speed. They do not attract the price. Indeed, sometimes they can act as resistance for value gaps, of course. But given that we have two sources of oil, pretty much today we could be frying eggs with a mix of oil and butter.

[00:07:41]Now we have to recognize this is a challenging level, right? We used to use it as support. We failed once and we are doing a first attempt. The first attempt yesterday on the daily managed to put a higher close of the price but not a higher high. And that as a sophisticated trader should tell you one thing only straight away. Tell it to me.

[00:08:09]Okay, I'm going to give you a hand here.

[00:08:12]You have this high at 67 to 80. This high is lower. That means that all that sweet liquidity that is there sitting is still sitting there. There has not been yet a liquidity hunt that goes beyond that level, catches that liquidity and squashes excessive longs into a fake out to the upside. That event can still happen and you can cheat and use trading different if you want to find the liquidity. But as a trader, I use it for graphical educational purposes. But indeed, when I want to look into liquidity, my personal preference in a way of never ever missing any liquidity is pretty much looking at the highs and understanding the levels that are verging to the recent price action. So, we got two setups in here. We got the bullish setup which is the breakout that manages to hold one the most bullish option the neckline or two that level of 64427 which I already gave you as the most bullish support located at an RSI of around 51 to possibly slightly below 50s in this area here depending on the speed of the RSI coming back to the support if it needs to do so. I already mentioned it in my private stream in my community.

[00:09:43]I do think that since we got this chunky liquidity in there that I don't call the chase of that liquidity done until we lose 61 to $60,000 which is the mid range liquidity that is around here that has been holding all this flag to the upside and never taking that level. is not very chunky. But if we ever come to 61, I'm going to say, well, we went there for the liquidity if we bounce.

[00:10:17]But if we don't bounce at 61, I'm going to immediately say, well, we went to 61, but that was not the real intention for price to go there. Price just crossed that level, but the real excuse to go down was deeper levels, 57.

[00:10:37]So any bounce from here must immediately reverse back to the upside and I believe still has chances to go to 69. Yeah, that's a huge move, right? You are at 67, you go to 61, you take the liquidity, you grab it, you pretend you're going to 57 and then you bounce.

[00:10:54]That is the setup. Every setup is not a forecast. Every setup is something to keep in mind and understand your opponent. You're playing chess here, right?

[00:11:04]Another thing that stands out in here is the liquidity that we just completed consuming up until 66.4.

[00:11:12]The shortterm motivation now is fully gone. There's no need for price if it comes back down to go only into 66. 66 is depleted of liquidity. You can see it in here. So now we have to deal with what I told you yesterday. We have a vacuum of liquidity pools between 66.4 and 675. That's pretty much over $1,000 of vacuum of liquidity. Not vacuum, but a depression, right? That's is if the other ones were heels, these are valleys in terms of the liquidity profile on the right hand side. But you can see that we already took half of that vacuum. We went into 67 that went beyond the yellow and it started already consuming an area that is really not very attractive. So we got those $500 of distance to go back into 6700 67500 and immediately start resuming again very highly attractive liquidity at 69. So you're basically saying that we can go down or we can go up and the reality is yes that is the case but if you are unable to understand the analysis of why up and why down unfortunately I cannot tell how to trade it but there's plenty of people that can take advantage of understanding those things and unfortunately as opposed to this market maker I cannot babysit your trades. So you take the alpha with you. If you know what to do with it, do it yourself. Do your own research, of course. So taking this away, there is a decision to be made that is crucial in here. But this is not just for scalpers. This is not just a decision shortterm. This is a decision between one going in an extended rally bare market into up to 75 or starting a bull market and we were are we are going to go into looking into the psychological map the fear and greed index and you're going to understand where we are high likely together with the weekly and monthly time frame. It's gonna give you a completely new perspective to map out this bare market.

[00:13:47]If you missed the video yesterday, do yourself a fe a favor and do it. Watch it right now. There is this resistance that belongs to bare market and there is this resistance number five at the top that belongs to bull market 66 versus 81 RSI on the daily. That 66 is located at 68500 pretty much today and the 81 today is roughly at 78544.

[00:14:20]So when you go too far off beyond the 75, you are starting to hit the purple line which you are not supposed to do in a bare market. And we got also this very interesting line in the sun. Just the horizontal level of previous support now turned into resistance around this area.

[00:14:40]Tried on the 15th of July now has been conquered again. And we are in a very similar situation than here. We have just a few days now to decide if $65 $800 is going to hold. As important as that. Of course, we can do a lot of noise around that level of resistance losses. try it again. But it's about time to make a decision and say, "Okay, we're due for an extended rally in the bare market or a complete shift and we start a bull market." You know, my base case scenario is still to go to lower levels in here. And we look into that fractal that is fascinating, the theory of the karma. I made a video specifically about that and many people really love it. And this is kind of a kachap on that karma theory. Everything that you gain in the bull market comes and haunts you in the same shape in the bare market. Crazy.

[00:15:42]So let's do the analysis of the weekly, the monthly very quickly. Let's go to the order book and then we start with the fractal and the psychological map on the fear and greed index. And that's how I call it for this video. So yesterday we saw it. We saw the green candle around 66 going into these highs. I was observing if we can take the highs of 15 of June and we haven't. We are seeing a little bit of a pullback with a small bull flag on the daily time frame. That bull flag has one responsibility when it comes to the weekly time frame. Defend this line 65 700. Wait a second. How many times are you going to say that number? Well, I have to say it every time it pops in.

[00:16:29]And on the weekly is plain like water. I don't know if I'm saying that right, but you're welcome to correct that in the comments and at the same time help the channel. You can see that the double bottom was using that level as support.

[00:16:44]You can see how precise were these weekly candles. One, two, three. Every candle was confirming that 65700 was really important level. So on Sunday, I'm going to be grabbing my popcorn, my pint, and seeing if it can hold there. A lot more exciting than watching the match between Spain and Argentina. I couldn't give an F when I was watching that. But this is a beauty.

[00:17:16]This is proper sports.

[00:17:19]If we can score above 65700, we can enter acceleration. That means that we go in the middle of the field and we start going straight to attack the other team. Not like Argentina that was stuck constantly against Spain that really slapped them in the face or slap us in the face.

[00:17:44]But if we get kicked like Spain kicked Argentina in here below 65700 that doesn't necessarily ends the party that just means that these four sticky green candles have done the job to take you straight in front of the goal which is to score.

[00:18:06]When do we get completely decimated like Argentina? when? Well, pretty much when there is just five minutes to play and Spain just score and you can never get to try another goal because you really are not dominating in the field. Well, how do we translate that into candles?

[00:18:29]We can get rejected at 65700 and build a red candle like this one of those proportions. basically something that undoes the move to the upside. You go up four candles, get a red engulfing candle here engulfing that candle maybe below 64 that is going to start raising the doubts in the longs and many of them that enter in here are going to be squashed. Ideally this week we want to even go even higher. Grab liquid liquidity at 69.

[00:19:06]Deal with this bad boy there and say okay we took it. That is done.

[00:19:12]Short-term liquidity is no longer attractive. Now you have to really go to 76 to continue doing similar damage. In this case larger damage but short-term liquidity stone the moment that happens if we are from the short point of view we need to be aiming for the deepest red candle in here in rejection against 65700.

[00:19:39]Similar analysis on CPR we just conquer it yesterday.

[00:19:44]Bears want to lose 61. That 61 is basically go to that liquidity that you form in all this range which is pretty much located at 61.

[00:19:58]We already saw it in here, right? And right after that, what do we need to do?

[00:20:02]We need to lose it. We cannot go to 61 just to grab it and resume to 69.

[00:20:09]Today the longs versus shorts are having kind of a hiccup because the RSI of long shorts is now below 30. That means that a lot of longs have pulled out this morning. Interestingly, futures and spot had more ask than bid. That is currently kind of reverting, but it's going just flat in here. The negative funding rates are gone and the delta kind of remains slightly elevated at 250,000 putting the loans at higher risk. The CBD across 58 to the top has been declining. There's been just a shallow bounce into the 20%.

[00:20:53]Retail has definitely pulled out from their longs. Purple Wells are kind of holding the line now at around 40% slightly more than yesterday. And who has been holding at the moment I will say is red and and purple. If you focus on those two, those two kind of holding the line to the upside and I think those are the only two that are skewing that average of all orders in CBD futures perpetuals to stay a little bit pointing towards that 20 percentile. Let's also appreciate how they are playing games with those $90 million from yesterday that now shifted back to 61. As the price came back down, it started chasing the price. Price coming down and orders going up, meeting at some point, never ever executing the order, just spoofing the market. So far as of today, it remains around the 90 million. I think now it's 88 million. If we go into market monkey terminal, there's been a huge battle. Remember that 65700 is a line in the sand for daily support on this particular line and for the weekly to reclaim a range that was lost that on the weekly could be massive, right? Because basically reclaiming a range is the best hope that a range trader can state for a bullish setup on the monthly. The picture is not very different. We have a point of control at $64,900 and we are slightly trading above it.

[00:22:41]But there is an ongoing battle as well in here. That battle was already lost the previous time. If you remember, there is this low in here in April 2025 on the monthly. And once we lost the middle ground, we came back to test precisely just to give a slight snap there at $8200.

[00:23:02]That was the lowest close and it became the high when we were doing a bare market rally, a revenge rally, a dead cut bounce. Right after that level, we lost one level down and now we are doing the same. This is the same role model which is the next support is 66900 on the monthly and that's the level that we just gave a kiss yesterday pretty much. So conquering a low can become a big deal in a bare market.

[00:23:38]Typically on a bare market you kind of respect those lows. You can conquer them like in here slightly where you are up and above that previous support of 19,000. You rally into 25. Sure. But eventually you put a new lower low into December.

[00:23:56]In the range in here, if we wanted to look very similar, that could mean going into slightly above $70,000.

[00:24:05]As long as you don't take that high, which in this case is 80 something, then you can still be due for a new lower low later this year. So very quickly, let's look at the fractal, the theory of the karma pretty much. So the karma is a very silly theory where I basically take the price action of the formation of the top of a market. In this case, this is 2017. I reverse it like this. And I look for the same sort of price action in the bare market. It doesn't perfectly match candle by candle. It doesn't have to, but it gives you an idea of what to expect. So if you were in 2017 and someone show you a pattern like this, once you find support, all you will have had to do is say, well, we might have an extended area of support, eventually losing it in an aggressive way, finding the actual bottom. And since you were in this market holding 6,000, eventually you can get to 3,000. It doesn't necessarily translate to the actual numbers but it gives you some sort of idea of what to expect in terms of behavior of the of the market. Now more interestingly if we go to 2020 2021 and 2022 and we take these two highs in here because in here we have a blowoff top. So we took just one high which is that level there corresponding with that but in here we have two bottoms. What? Two tops. And what does that tell you for the incoming bare market? Are we going to have two bottoms, too? And yes, we did have two bottoms. We have two tops, two bottoms, one top, one bottom. So far, it's going well. But let's overlap this particular pattern. And I already have a copy in here. But so you believe me, I'm going to put it like that. So you can see that is actually that one that got copied is basically if you place it like this and then you get that copy and you put it upside down, you're going to see this is one bottom. This is the next bottom and it's pretty much aligned with $16,000.

[00:26:28]Just $1,000 away. Remember that I'm not aiming to match. This one went slightly beyond into 2.5. Fair enough. But this one, look at how it matches. It does this up and does that final bottom at 15. How different was the top of the market this cycle? This top was a double top. People say that this can be also considered a double top. It's slightly different because this goes a little bit higher from 108 to 126 versus from 65 to 69. That's just 4K. So this constitutes a lot more a double top than this one.

[00:27:14]But some people might still accept it as a double top.

[00:27:18]If you take all of that again with this three levels there and you overlap it with the formation of bottom market that we are currently experiencing. You can see that this if we force it to match that level on the high at 82 then it comes to 58 then it goes to 67. And here we are today following the pattern. So the price action now needs to decide if it's going to like my fractal and in the next few days it should not cross much more than 69. Otherwise it's going to spoil significantly the fractile. But if it holds at 67 then the next thing to come should be a move into 59 followed by another capitulation into 50. Then we get that painful state that typically happens around August, September with a new low and eventually bottoming in November, which around here happened also in November by the way. So I am not calling for this. I don't even know if it's going to happen. I am just literally eating popcorn and seeing if we can get to any of these levels.

[00:28:39]following the theory of the karma. Now let's go and look at the psychology of bare and bull markets so we can see where we are in that map. And I think we have found a very distinct setup that happens every cycle. If you never seen me talking about this, well basically I do TA on fear and greed index and I look for the area below 10. That period tends to last very little in the past two bare markets is just that area there and that area there. After that what follows is very interesting and it goes into the resistance then it forms a foundational area in here. I have talked about this so many times so I'm trying to summarize it. If it's the first time that you're watching this, definitely I'm not gonna sell the idea to you and I'm not intending to because I don't want to get all the people that watch every video to get tired of listening to this. We go to the resistance, we form the foundation and we enter in a bull market. We already did that exercise and we fail.

[00:29:46]And the reason we fail is because this particular cycle we have not been below 10 for a limit amount of time. We were expecting that to be this. But that happened in April. That's a little bit too early. Every cycle that that thing happens a little bit late. This one was in June. This one was in December. So it's coming closer. It's coming earlier in the cycle. And it's also getting more extended.

[00:30:16]So, we already have this rally into 48, but now we are having a rally from below 10 in June. And I'm paying attention because that happened here in June. So, the one that I call off earlier this year may have been just this one that matches with earlier the year in which case we need to focus. And I'm gonna make this bubble smaller. And I'm gonna say this is the area below 10 that we care. now and this is the resistance that we care at around the 40 that is just around the corner. So we cannot ignore it. If we get to 40 in here two areas to really pay attention the rejection at 40 will resonate with the previous cycles and that will just do the same thing which is go back down into around 17 to 20 form a base and look for the exit into your bull market around the end of the year. So this area in here is from September into December.

[00:31:18]Right? The bounce is due for around August if not earlier.

[00:31:25]Other similarities is this area in here with the exit above the range of the RSI applied to the fear and greed index that matches with this one. Then the breakdown of the ascending sloping support and the fact that we are in this area trapped in the triangle just like we are in here. We are about to break out above the purple line again as if we were already in July. In July at that timing, we were approaching that bubble that is waiting for us in here. We'll see if we can break out that level or if we take the previous high of 50. You take the previous high and you are in a bull market. Fear and greed index doesn't accept in the bare market to take previous highs without entering into a bull market. That is an alpha that has stayed like that in every cycle where there was available the fear and greed index. So our line in the sand at the moment number one is fear and greed index going beyond 50 bull market pretty much going into 40s and anywhere in between. That is what we did the previous cycle right before we put two more bare flags with two more lows into $15,000. So that just resonates. Now why we do these things is just magical lines in this particular case as opposed to technical analysis. We are judging emotions. We are talking about people that are suffering a huge amount of stress due to the fear that this comes with. Right? Being below 10 is as big as it gets in terms of fear in a bare market. You can be in a bare market in bare flags 0, one, and two where there's still hope. But once you get into the third and you're below 10, that is where people experience the most fear. And eventually you get the price going into deeper levels, lower price. Four and five is lower than three. But the fear index says, "No, I'm going to divert. I just cannot take any more fear anymore and I'm going to start getting a little bit greedy at this point." With price going deeper, that divergent is extremely important. And we even track it in here, right? Those green levels in there are divergences of price against fear and greed index, which I do with my universal divergence detector indicator part of my suite. I can plug this bad boy to anything literally and find divergences and look how they play out.

[00:34:07]I mean, they're fantastic. Sometimes they fail, but if you use them based on regime, they tend to have a really good performance as you can see in the past performance in the chart, which definitely doesn't guarantee future performance.

[00:34:24]So guys, I think we are in a massive crossroad of elements in here on the weekly time frame. This liquidity in here can be the recipe for two outcomes.

[00:34:35]it could attract the price just to go for the liquidity and then fail losing $65800 and going into the low 60s to confirm that this was just another bare market rally. It can even go a little bit higher into 75 76 and take that liquidity. But further than that, it starts turning into very elevated levels of fear and greed index going into again grid is not something that you expect to see in a bare market. neither doing a massive V recovery that goes into the upper range and starts tackling the top liquidity which is reserved for the actual return of the bull market. So in the short term I'm looking for a resolution. I'm looking to see if either we are already done or if we are going to use this or we are going to use a little bit higher.

[00:35:37]After that I continue to have personally my bias attached to the idea of lower lows. I can definitely be wrong, but I always tend to pay attention to the things that I consider the most likely outcomes. If those outcomes do not come in, I just miss a big profit and I probably do a break even somewhere. I try to focus on the risk management to get to that state as much as I can.

[00:36:06]Guys, I hope you enjoyed this video. If you did, if you did, hit the like, subscribe, write down a comment down below. That's always really useful. And I'll see you on the next one. Take care.