The number of large speculators declines

Bitcoin attempted to establish a new high above $37,978 in the past two days but failed. In the meantime, the decline in ADX on the daily chart began to reflect a slight loss of bullish momentum; additionally, MACD, Stochastic, and RSI reversed, now pointing to the downside. These actions heighten our alert level as we continue to see the falling number of Bitcoin addresses with balances exceeding 1,000 BTC. Therefore, in the next few days, we will pay attention to the support at $35,002 and resistance at $37,978. A breakout below the support will raise the odds of continuation lower. In contrast, a breakout above the resistance will increase the odds of Bitcoin testing $39,000 and potentially even $40,000. To support a bearish thesis, we would like to see a further decline in the mentioned indicators. Contrarily, to support a bullish thesis, we would want to see RSI breaking back above 70 points and trending within the overbought territory. Furthermore, we would want to see a reversal to the upside in Stochastic and MACD.

Illustration 1.01
Illustration 1.01 shows the daily chart of BTCUSD within the upward-sloping channel. A breakdown below the channel will be bearish.

Technical analysis gauge
Daily time frame = Slightly bearish
Weekly time frame = Bullish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.