BTC/USD - Rejected long term trend, bulls need more fuel?It's been a while since my last BTC analysis, so figured it's time to do one again.
As we all know, it’s been a relatively slow week for BTC until today. We finally got some volatility back in the market, and as anticipated, it turned into a red Monday. Over the weekend and late last week, we encountered the long term trend which is one of the contributing factors of the drop from 6k. This is the trend I’m talking about:
Many people say trends don’t work with BTC, but I think the picture above is a pretty clear indication for that being just fake news.
It’s worth taking note of the candle pattern we had when we hit the trend prior to the 6k drop, and compare it to the current candle pattern. It’s actually quite similar, but it’s nothing else than a candle fractal for now.
For bullish continuation on BTC it’s important we hold the blue trend support and preferably match it with a price level such as $3590. I have currently swapped short on my Bitmex portfolio and is hedged with a 25% long on it just in case. Plan is to flip from short to long again between 3600 and 3700 unless we have some big volatility and crash right past it.
On the right chart above, you can see the possible head and shoulders pattern forming on the 4h and 1d. It’s very important to take note of this one, because if the head and shoulders pattern decides to play out, the right shoulder should in theory flag outside of the triangle, which could flip the pattern from bearish to bullish. Anyways, if manage to hold $3850 and move towards $3950 (or as far as we can go without breaking the trend), it will make for a really good short opportunity as it’s making the right shoulder and could indicate more bearish price action.
For now it’s quite unclear the direction due to low volume. Low volume can also lead to increased volatility and shakeouts could occur, so be cautious when trading. I will try to update this post whenever something big happens.
Take care, and comment if you have any questions!
