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Trading Range Forming - Bull Profit taking

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
The bulls have been strong for many weeks now and have created several gaps below. This most recent bull gap around 9500 is the third and therefore likely an exhaustion gap. Exhaustion gaps get filled most of the time, where the bulls look to re-establish longs and bears buy back shorts.

Last week was a weak sell signal, but a large tail which is a sign of bull profit taking after testing the start of the bear channel . The bulls need a strong breakout above here and the all time high for a bull trend case. Even if there is bull continuation, there will likely be profit taking at the all time high, forming a larger trading range. More likely, prices will go mostly sideways to down for the next few weeks to months, where the bulls will try to form a higher low and larger second leg up. The most obvious prices for a higher low are 7600 micro double bottom / failed bear reversal and the 6200 bull gap.

If instead the bears get a strong reversal soon with good follow through, and fill the bull gaps; prices will likely test the 4000 level and the bottom of the developing trading range.

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