Bitcoin vs USD - Heading Down to 5800-6000ish Support Zone
Updated
As you can see we recently broke (as expected) to the upside of the falling wedge and then to the downside of the ascending wedge. We now find ourselves trading within a symmetrical triangle pattern. Given these are a continuation pattern and we find ourselves in a clear downtrend; a break to the downside based on the height of the symmetrical triangle - will likely send us to the support zone between around 5450 and 5800. This would represent a great buy zone.
It's also worth noting that shorts are decreasing but could be forming a cup and handle pattern. On the flip side longs haven't really moved at all. This tells me that the if the BTCUSDSHORTS cup and handle pattern is validated it will also in turn validate the symmetrical triangle pattern. There is however, a LOT of indecisiveness in the market at the moment and low volume; so this symmetrical triangle will fail unless we see increased volume with a break to the downside as confirmation.
It's also worth noting that shorts are decreasing but could be forming a cup and handle pattern. On the flip side longs haven't really moved at all. This tells me that the if the BTCUSDSHORTS cup and handle pattern is validated it will also in turn validate the symmetrical triangle pattern. There is however, a LOT of indecisiveness in the market at the moment and low volume; so this symmetrical triangle will fail unless we see increased volume with a break to the downside as confirmation.
Note
I should also add that if this pattern plays out, then any shorters will need to be careful. As per the cup and handle pattern that would emerge on the BTCUSDSHORTS chart the increase in shorts would be pretty fast and parabolic. This combined with a lot of buyers waiting in the support zone for such a drop; would see us bounce back up just as fast. In such a scenario the Feb low might not even provide any resistance and we could see ourselves returning to around the same zone we are currently in. This could be the start of a bull run as I imagine we would have found our ultimate market bottom. Though, that being said; it is not uncommon for one last test of the market bottom to occur before the bull run emerges. This is all hypothetical of course, and first we must wait and see if we confirm a break to the downside of the symmetrical triangle.Note
We have tried over the past 5 candles to break to the upside of the triangles resistance line, however we have failed. Volume has been incredibly low. As we are nearing the apex of the triangle pattern, the shorts cup and handle pattern is continuing to form nicely. If the cup and handle breaks above the rim then it will definitely provide the fuel to the fire and break us to the downside and validate the symmetrical triangle pattern.
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