The current chart
The current chart shows a strong range between 28 654 – 30 861 USDT, which is essentially a price range in which we have spent most of the last month. After all this time we saw a strong upward movement, which had bigger volumes. At that moment it would have been ideal if the move tested the top of the range. But, Bitcoin almost never does ideal moves.
4h chart of Bitcoin with a support and resistance, Source: Author’s analysis, tradingview.com
But this has happened yesterday. We have fallen back to the range. This, overall, is not bearish but it is important for us to stay in this range and not to fall below. However, what is important is the way we have gotten back to the range. We could have done this slowly, by creating a falling wedge formation and move slowly back to the range as shown in the chart below.
4h chart of Bitcoin with a falling wedge, Source: Author’s analysis, tradingview.com
In this case we could be talking about rather bullish structure. But this did not happen. On the contrary, we have seen a strong dump back. The most important factors of this dump were:
- S&P 500 has not moved significantly and thus we cannot say that Bitcoin was following the traditional markets.
- The selloff had long candle which usually signifies strong volumes.
- This was also supported by volumes, which was greater than during the pump.
All of this points to the fact that this might have only been a Fake breakout. All in all, this is not very bullish.
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