BTC: Aftermath of the Drop - 14% Relief Bounce STILL Possible!

Bitcoin has witnessed another strong drop, but has not triggered the main stop loss, as we are now approaching the demand accumulation zone. Now that we are getting closer to our CME Gap, we can start analyzing the long positions, while everyone remains bearish. We have remained bearish while everyone was bullish. While everyone remains bullish for the time being, we may start building long positions every step down. Remember folks, we have been calling for the drop weeks ago. Here is why we believe a relief bounce is in the books:

1. Strong bullish divergence on the 1H TF.
2. Contrarian theory suggests that while the 'Crypto Fear and Greed' Index is now showing a 'fear', we can assume that most people will be shorting the bottom at this point in time.
3. Possible parallel channel in the making here, connecting the high and low points.
4. If the bottom has been established, we can see a strong relief bounce to the 618 fib level, which is a 14-15% bounce from these levels.

Playing the relief bounce does not make us immediately bullish for the mid term. We have consistently noted that we are still going to be seeing mid 9K levels and will be monitoring the situation on how the market reacts at that certain period of time. Too many people are making predictions way ahead of the spectrum when they do not know what will happen in the immediate term.

Trade Safe.

X Force