Bitcoin: Trend Reversal In Play?

Bitcoin has pushed into the 22 to 24K resistance and appears to be developing a higher low formation. Is this the beginning of a bullish trend? It is too early to arrive at such a conclusion. In this article, I will explain why and what to look for in the coming week.

First thing to keep in mind: The broader price structures have yet to be compromised and continue to favor a bear market. The 22 to 24K resistance is the first area that needs to be cleared before I would be open to the greater possibility of higher prices. A buy signal may be in the process of setting up at the moment, but it is appearing in a very conflicted location. It is the LOCATION that carries more weight in this instance, signals can appear ANYWHERE randomly. Until 24K is CLEARED, I will continue to maintain a bearish outlook.

The coming week is heavy with economic events and major company quarterly reports. With the yield curve still inverted, not to much has changed in terms of the economic environment and continues to favor a more bearish outcome in the near term. Any surprises resulting from the events this week can act as a very bullish or bearish catalyst and change things VERY quickly. Understand that markets are HIGHLY efficient and mostly random which means NO ONE, no matter what kind of nonsense they throw at you can accurately forecast how this situation will play out. The best we can do is evaluate price structures and gauge a short term probability. And when it changes, YOU CHANGE WITH IT. There is no room for absolute opinions in a market environment that is random.

The best way to keep risk to a minimum in this situation is to operate on smaller time frames or stay out completely. Long setups are extremely risky, and while the location is attractive for swing trade short setups, there are none at the moment. Recent sell signals have offered small profits and have not followed through at all which could be an effect of lower than usual activity associated with summer time (this is very typical for stock market in the U.S.).

IF you are operating on smaller time frames: The 21,500 AREA is potential minor support and a break and close above 23,250 is a new buy signal. IF price manages to clear 24K this week, then the 28 to 30K area is the NEXT resistance zone to consider. There is NO WAY to know if price will get there. Trades have to be monitored closely, especially in the face of important economic events.

Bear market rallies are confusing because they often go against "logic". Markets are IRRATIONAL and can do whatever they want for ANY reason. Learn to TRUST and LISTEN to PRICE NOT PEOPLE OR LOGIC. Being a LISTENER of the market, I am completely open to the possibility of a trend change, BUT the proof has yet to appear.

Thank you for considering my analysis and perspective. I hope you find it helpful.