Bitcoin has recovered from its major loss earlier in the week, but is encountering strong selling interest below 6000. As things stand, I see significant risk of a lower high here, followed by a repeat of the August-September price action:
Back in September, Bitcoin set a new record high just shy of 5000, before carving a lower high and correcting sharply towards the channel floor, some 2000 points lower. Of course this correction was largely driven by China risk, but the current structure looks eerily similar. If this scenario plays out, BTCUSD could trade as low as 4500 before (hopefully) resuming higher.
If we zoom in, we can see pair has just printed a Shooting Star reversal candle:
A retest of the lows looks extremely likely at this point. Pair could still find a bid there, but the chart looks pretty ominous at the moment. On the bright side, I'd love an opportunity to get long again below 5000!
UPDATE: May as well put my money where my mouth is - have entered short.
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