1. The breakout above the failed.
2. BTC was rejected on it's initial test of the exact bottom of the major overhead 6000 , failing to maintain a price above 5777 on the Coinbase chart.
3. This price movement concurs with the exhaustion seen in numerous indicators.
Think about that for a second. We're seeing divergences in the , the , Stochastics (you name it) while testing THE MOTHER of all overhead resistance. It's like Bitcoin is wounded, and still charging into a fight with Godzilla. Most likely, Godzilla (the overhead ) is going to win this first fight.
HOWEVER, there is definitely a lot of conflicting evidence. For example, BTC just closed a candle above the weekly 50 MA (not shown) which has historically signaled the beginning of the next bull market. Although that is definitely a positive sign, I simply can't ignore the immediately negative picture that I see in this market.
The NVT , which I have talked about at length, is still flashing a sell signal. Every single weekly sell signal that it produced, throughout the entire history of Bitcoin's existence, has resulted in a drop to the 61.8% retrace, at a minimum. Right now, you can see our 61.8% retrace is at about 4170 here on the Coinbase chart. With that said, there is now a ton of support, between the current price and the 61.8% retrace. Namely, the bottom of the rising blue channel and critical rising moving averages that are in that area (not shown.) So, from a historical standpoint, price is most likely going to sell off at least to the 4100 level, according to the data gathered from the NVT .
From a fundamental standpoint, we can't forget about the ticking time-bomb, which is the whole Bitfinex and Tether scandal. Bitfinex now looks like the new Mt. Gox, and if things escalate with Bitfinex and Tether, we could see a major selloff in the crypto space. Some may call it FUD, but it's beyond FUD now that people are being arrested and the case is being investigated by the New York Supreme Court.
In terms of the potential that we have developing, we have to now see a continuation selloff to complete the right shoulder, or it will be negated. For the record, just because the right shoulder is taller than the head, does not mean that it isn't a . That makes it less likely to develop into one, but it doesn't mean it can't still happen. There are patterns that play out perfectly all the time, with higher left or right shoulders. Just look at the inverted on the bottom of the chart. The left shoulder has the deepest trough. Yet, it played out perfectly as an inverted pattern. So, I will continue to watch how that develops.
Price is currently testing support on the recent high from the 24th. If that level is held, we will likely make another run up toward the top of the channel. If not, then I would expect a potentially sharp selloff that could complete a right shoulder of this asymmetrical (potential) pattern.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***