The events since September 2020 and April 2021 are a classic text book accumulation / distribution. The old saying says "Never short a dull market". Bitcoin was able to trade between 6,000 and 10,000 and it was bouncing in a range for a while. The volume had peaks in March 2020, when it was the mayhem in the markets, and once it recovered it kept discretely pushing upwards until it broke the trading range at 15,000 when it made a 52W high, and from that point on it was a very strong rally that gained an outstanding momentum to the upside until it reached the 55,000 - 60,000 level. At that point it found strong resistance at 60,000. This is a classic distribution, where the smart money waits for short living rallies that reach their target level to sell and get out of the market leaving late traders holding the bag. The result we already know it, Bitcoin lost support at the 50,000 level where the demand had dried and it dropped to 30,000 where a technical support made it bounce back to 40,000. It has been in a trading range between 30K and 40K, and this bouncing is forming the right shoulder of the dreaded Head and Shoulders pattern.
Just like any other pattern, it has to be confirmed, but so far what we see is a weakening bullish trend, a weakening momentum to the point that it is at a pivot point deciding if it goes for another rally, consolidates or just drops back to the 15,000 levels. The volume is bearish and the outlook points at another selloff. The key is the 30,000 support level. If this holds then it may go to a consolidation triangle and it may gain more momentum to attempt another crazy lift off to 45,000 or more.
In the mean time the 30,000 - 40,000 is a good trading range that if it's well timed it can yield nice profits. No "Hodling", just trading until it breaks above 40K. Basically levels below 30K is pretty much game over for bitcoin for a while.
Note on the indicators, I use three indicators, trend, momentum and volume, those have been customized to my specific needs and the only one published so far is the ribbon.
Just like any other pattern, it has to be confirmed, but so far what we see is a weakening bullish trend, a weakening momentum to the point that it is at a pivot point deciding if it goes for another rally, consolidates or just drops back to the 15,000 levels. The volume is bearish and the outlook points at another selloff. The key is the 30,000 support level. If this holds then it may go to a consolidation triangle and it may gain more momentum to attempt another crazy lift off to 45,000 or more.
In the mean time the 30,000 - 40,000 is a good trading range that if it's well timed it can yield nice profits. No "Hodling", just trading until it breaks above 40K. Basically levels below 30K is pretty much game over for bitcoin for a while.
Note on the indicators, I use three indicators, trend, momentum and volume, those have been customized to my specific needs and the only one published so far is the ribbon.
