So Consensus is now in our recent past & anticipations of huge run ups in cryptocurrency prices have not materialised. Yes, it’s true, historically the Consensus has been the catalyst for enormous increases in the price of cryptos but the past is not a predictor of the future. It was not for a lack of positive news & announcements as over the past couple of weeks, there have been constant headlines of positive news for cryptos. For example, JP Morgan experimenting with blockchain, large & established companies partnering with cryptocurrency projects (ahem, not you Pornhub… think Bright Foods instead). Cryptocurrency prices have failed to react positively to this news.
So with Consensus behind & no guaranteed positive news for the future, prices in the near future look more likely to go down than up. The technicals also aren’t painting a pretty picture. For much of the day yesterday, BTC traded in an ascending triangle. This is a bullish pattern which typically results in price trading in a tighter & tighter range before breaking to the upside. Well, this pattern broke down & bitcoin broke to the downside. $8200 has acted as significant support. Yesterday, the daily candle managed to close below this level. $8200 was not only significant support but it was also the 50% Fibonacci retracement level between $10k, & $6.6k. Price action is currently working it’s way back up but if it manages to get to the $8200, I would be expecting this to turn from support into resistance. $7850 has been acting as a support level & this also happens to be the 61.8% Fibonacci retracement.
So, at least for today, all this signs are pointing towards shorting btc. The risk reward just makes more sense this way. If price action manages to come back up above 8200, a stop loss could be set at 8250. Altcoins are also losing heavily today showing the overall cryptocurrency market being in a downward trend.
Important Disclaimer: Ladies & Gents, this is of course not financial advice. This is for entertainment purposes only.