After yesterday's large drop in price, I found a couple of things; however, I do not know if the bullish sentiment has remained, I do believe that because bitcoin has broken 8000 again, there is a chance that the bulls may still have this and that yesterdays' price drop was just drop because of news but not a change in market sentiment.
Short term analysis: This the 45 minute chart and there are a series of chart patterns that can occur, and there are 3 highly probable situations, but I only drew two of them.
Considering that there was a significant bounce that drove the price up back into the daily bull flag, I wanted to understand what was happening on a micro level, and it looks interesting.
3 Possibilities:
1.) The most likely possibility I believe is the orange line, it is an interesting pattern and it is very rare, it is the inverse head and shoulder continuation pattern. So far, shape wise there would be a vague left shoulder and a prominent head; however, volume does not exactly fit the profile with the second drop being greater than the first, but it is still possible that this plays out like and inverse head and shoulder with another small drop that is similar to the left shoulder before a continuation of the uptrend. However, this is a rare occurrence and the inverse head and shoulder does not usually occur as a continuation pattern. Although the volume doesn't match, I still think that this will play out as an continuation pattern and on the longer time frame, it would still have the appears of a bull flag.
2.) Not drawn in is a movement down to test 7900 once more which I think is still possible, and I do think another strong test of 7900 would put the continuation of the uptrend at risk.
3.) The finial possibility I believe that is likely is a move up from this point because it does appear that bitcoin has made a small pennant in the 45min time frame; however, pennants have a high failure rate (roughly 50%), is it would be in question.
Short term analysis: This the 45 minute chart and there are a series of chart patterns that can occur, and there are 3 highly probable situations, but I only drew two of them.
Considering that there was a significant bounce that drove the price up back into the daily bull flag, I wanted to understand what was happening on a micro level, and it looks interesting.
3 Possibilities:
1.) The most likely possibility I believe is the orange line, it is an interesting pattern and it is very rare, it is the inverse head and shoulder continuation pattern. So far, shape wise there would be a vague left shoulder and a prominent head; however, volume does not exactly fit the profile with the second drop being greater than the first, but it is still possible that this plays out like and inverse head and shoulder with another small drop that is similar to the left shoulder before a continuation of the uptrend. However, this is a rare occurrence and the inverse head and shoulder does not usually occur as a continuation pattern. Although the volume doesn't match, I still think that this will play out as an continuation pattern and on the longer time frame, it would still have the appears of a bull flag.
2.) Not drawn in is a movement down to test 7900 once more which I think is still possible, and I do think another strong test of 7900 would put the continuation of the uptrend at risk.
3.) The finial possibility I believe that is likely is a move up from this point because it does appear that bitcoin has made a small pennant in the 45min time frame; however, pennants have a high failure rate (roughly 50%), is it would be in question.
Comment:
An extremely low volume breakout... if this can even be called that. It puts the pattern in question and I believe that this could be a failed inverse head and shoulder continuation pattern. If Volume does not appear at some point soon, then I suspect that we will have another move down to test the lower limits of the supports.
Comment:
So, bitcoin made a move down, I was going to state it once more, however I had mentioned it prior, but right now the support of 7800-7900 has remained strong. I suspect a similar move to the last bounce at 7900 to happen, in which a smaller lower volume move to lower levels will occur before it gets pushed back up dramatically. But I am not clear on that happening. A break of these levels would terminate the bullish sentiment and the bull market.
Overall, bitcoin still looks good on the daily level and I do not doubt that the bulls have control, however, time and price will be the only way to confirm it.