In my last post we were at @8500$ and i posted why i considered we were going down and why 8500$ was a important level :
- It's where the price meets the 200 day (MA) witch already acted as resistance and support 3 times in the past.
- If you count Elliot waves on the daily chart from 5800$, 8500$ could be counted as either wave 5 of 5 or wave 5 of 3 ( no matter how you count, there is a pullback after)
- The daily rsi is overbought.
- In the past we had double top's as a recurring theme (price action likes fractals and repeats them) .
- If the price does stop there, it would be the 4th lower low 16.000 - 11.500- 10.000- 8500.
- Bear markets ( and we still are in a bear market ) don't usualy last just 7 months.
Bearish View
Most of those arguments are still valid so it is still useful to keep them in mind. To them we can ad :
- the fact that the @6000$ trend line was tested 4 times already (the more you test a suport the more likely it is to brake it)
- we already had 3 failed rallies attempts (the 4th or 5th, if we even get them, are far less likely to result in a bull run)
- Rsi Bearish divergence on the daily time frame (the price is making lower Lows, while the RSI is making higher Highs)
- we didn't seem to have a capitulation phase like we had in Feb 2018 (where prices dipped down to 6000$ and quickly back up to 8000$ in a single daily candle)
That being said, where is Bitcoin now ?? Well, i believe it is in a Bearish descending triangle. Actually... it can't look anymore like the text book picture of a descending Bearish triangle if it tries.
Bullish View
In order to adapt to the market any trader should not only look at his own BIASED opinion but should also try to find reasons to invalidate it, this will help him be prepared and have a plan if the market turns against him. So let's see the arguments for the bullish view.
- The large amount of shorts!! Most of the market right now is bearish and putting money on the price going down (most of the market is usually the one losing money so you don't want to be there when they do).
- the market structure isn't broken yet ( the @6000$ support still holds)
- while i personally consider the 3rd rally failed, technically it hasn't yet (not until we go under the 5730$ price point) according to Eliot waves wave 1 can retrace as far as 99% and still be considered wave 1
- we can still get a surprising news like the ETF being approved witch might push the prices up enough to sustain a bull run.
No matter how you lean, Bullish or Bearish, in the end it is just a game of probabilities not certainties and anyone must plan accordingly . Ps: I would appreciate your votes or comments . Writing for no one might be useful to crystallize your thoughts but it's no fun.