BTC Bitcoin has now fallen below the yellow support trend line and is testing the previous lows from mid 2021. I'm expecting a bounce in this area, potentially back up to the red zone around $35,000 which would be an excellent opportunity for shorts, especially if it meets the VWMA 100 on the daily chart in that zone.
I think it's likely it falls after touching the red zone, VWMA 100 or blue downtrend line. My guess is that it chops around in the triangle area for a while and tries to get supportive on the yellow lines. That area lines up well with the previous top of $20,000 and also the bottom of what I call the bounce zone which is the purple cloud shown on the chart. That bounce zone is made up of the EMA 1000 and EMA 2000 and the EMA 2000 was the absolute bottom for Bitcoin after the 20k to 3.5k drop in 2018/2019.
I'll be looking for wicks down below the yellow lines and for price to stay supportive in that area and make higher lows once it gets there. It will definitely meet resistance at the blue line when it gets there, but once we clear that blue line it should start to slowly move upwards again. Watch out for low volume pops while we are in this lower triangle as those will likely be bull traps.
I'm a big fan of using the VWMA 100 and 500 for trend detection so I'll be looking for the VWMA 100 to be above the VWMA 500 as well as price staying supportive above both VWMAs before being bullish again. It is also very likely that price comes back down and retests the VWMA 500 after we break the downtrend. If it does happen, price will need to stay supportive on the VWMA 500 and then reclaim the VWMA 100 before really starting the beginning of the next bull run.
It is important to note that regaining enough momentum to start another bull run takes time and price will likely consolidate for an extended period of time, so keep that in mind when entering margin longs as margin fees will eat away at your profits while you wait. Wait for major volume to come in to avoid these situations.
If we go into a major recession, then I don't think the 20k level will hold. But if we only experience a mild recession and most markets start to recover semi-quickly, I think it is very possible that the scenario outlined above will happen(or very close to it).
I think it's likely it falls after touching the red zone, VWMA 100 or blue downtrend line. My guess is that it chops around in the triangle area for a while and tries to get supportive on the yellow lines. That area lines up well with the previous top of $20,000 and also the bottom of what I call the bounce zone which is the purple cloud shown on the chart. That bounce zone is made up of the EMA 1000 and EMA 2000 and the EMA 2000 was the absolute bottom for Bitcoin after the 20k to 3.5k drop in 2018/2019.
I'll be looking for wicks down below the yellow lines and for price to stay supportive in that area and make higher lows once it gets there. It will definitely meet resistance at the blue line when it gets there, but once we clear that blue line it should start to slowly move upwards again. Watch out for low volume pops while we are in this lower triangle as those will likely be bull traps.
I'm a big fan of using the VWMA 100 and 500 for trend detection so I'll be looking for the VWMA 100 to be above the VWMA 500 as well as price staying supportive above both VWMAs before being bullish again. It is also very likely that price comes back down and retests the VWMA 500 after we break the downtrend. If it does happen, price will need to stay supportive on the VWMA 500 and then reclaim the VWMA 100 before really starting the beginning of the next bull run.
It is important to note that regaining enough momentum to start another bull run takes time and price will likely consolidate for an extended period of time, so keep that in mind when entering margin longs as margin fees will eat away at your profits while you wait. Wait for major volume to come in to avoid these situations.
If we go into a major recession, then I don't think the 20k level will hold. But if we only experience a mild recession and most markets start to recover semi-quickly, I think it is very possible that the scenario outlined above will happen(or very close to it).
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