1) Will the rally fail again, get stuck below 4150 and drop or even make a small low break to 4250/4350 (bull trap) and dump again.
2) Will we see a decent rally towards 4400/4600 and simply find too much resistance there, making the the rally that started since Dec just an correction. Meaning we continue the long term bear trend again.
3) Eventually see a break of the 4600ish level, which has been the key level for me between a bear and bull trend on the mid-term. If this break with conviction, very likely to see 5K+ prices again.
Short term: It is very likely to see an being completed the coming days towards the 4000 level again. Just as my blue line on the right suggested. In my public channel i posted a message yesterday:
Looks okay so far. is not great but so far good enough. Important to see that buying on 1m and 5m stays higher than selling . A drop up to 4040/30 is allowed, but of course would make it more tricky. If it touches 4150ish and THEN drop to 4000 or a bit lower, would still be okay, like my chart on TV shows. Seeing it drop below 4000 when not being able to brake the 4100 would be a bad sign. Preferably seeing OI staying stable or rise, it should not drop . Still not at home so can’t watch it closely
It reached 4130, so we can say that condition has been met so i have not assumption to think about something else than an to 4000 and up again. I think worst case, we drop to 4000 and fail to get above 4100 again. So in other words, think a big chance it will play out like this, but only thing that can happen, is if it plays out like the red line on the left.
About the play on the right, usually should stay below the 4100, but in theory it can reach 4130/4150. A big clue in this, is if the price moves up to the 4130 but with very low , than likely to still see that drop .
Mid term: For me, the 4000ish is the key level now. In theory we can reach the green support line around 3900/3950, but at this stage i don't think bulls should give away that much ground. Think it's very important to see a higher low form above that support line. That's why i want to see it stay above the 4000ish.
If all of this plays out we come to the next important conditions/scenario's.
1) If we see a rally happen from the 4000, there is no more room for small and low rallies. If we bounce up from the 40xx zone, the next push up has to be like 300/400 points with very high . as shown on the right, needs to reach those Dec levels again. If this happens, number 3 scenario/question will be VERY likely. I am not talking about a short squeeze, meaning a rally within minutes, but more like a normal rally, as shown on the left in the yellow circle.
2) If we see a normal rally towards 4400/4600, very likely to see a big drop again, for a higher low around 3500/3700 or simply a big failure and we crash even more.
Sounds complicated, but it's actually very simply. To illustrate it, i have two other assets to to give you a picture of what i mean. So left means 5K prices.
Previous: Bitcoin's Big Correction or Trend Change? Part 5