BTC 4hr - Downward Test of LL of $5750 or Upward Test of 50 SMA

Looking at the 4hr chart for BTC, I’m thinking it will move to 1 of 2 positions in the short term. I’m not betting on either option, but I think confirmation on these moves would make for good points to make moves.


Option 1: Move down to test previous LL of around $5750 (Purple Arrows) - 70%

• A. Failed break lower - likely to quickly move upward to 50 SMA or straight through to top of the falling wedge (top dotted line). - 30%
  
• B. Breaks lower - likely moving to bottom of the falling wedge (lower dotted line) quickly. - 70%
  

Option 2: Move up to test the 50 SMA (Cyan/Blue Arrows) - 30%

• A. Breaks above 50 SMA - Buy immediately at market price. Will likely be good for move up to the top of the falling wedge (upper dotted line). Probably a good idea to place some stop limit orders in this range. - 40%
  
• B. Touches but fails to break above 50 SMA – Will likely move down to test previous LL of around $5750. Depending on direction of move from $5750, will test bottom or top of the falling wedge. - 60%
  

Probabilities based on MACD downward cross.

Not a pro trader. Not Advice.

Comment:

Looks like Option 2 ended up coming to fruition, testing the 50 SMA where it was met with significant resistance, bringing Option 2 - B. into play. So, I believe BTC will likely move down to test previous LL of around $5750. Depending on direction of move from $5750, will test bottom or top of the falling wedge. The area surrounding (about $5650 - $5850) the previous LL of $5750 represents a significant support zone, so if it does ended going lower than that support zone I don't think it would move there without some sideways action or a temporary upward move, unless it tests it on a weekend where the bears seem to dominate with low volume.