BTC is traveling within an upward channel within an upward channel; within an even bigger upward channel (chart needs to be zoomed out to see the bigger picture). It's like a mountain hike. Even the fittest hikers need a moment to take a sip of water every now and then. That is what really happened in the last 24 hours. The drop felt like a bloodbath while it was happening, but all BTC did was to run a test at the daily 21 EMA. In my last post I mentioned when EMA 50 crosses above SMA 50, price tends to test EMA 21 more often than not. BTC just did that in a matter of hours, that's all. The reason for running the test is basically because, things get over extended in this condition and psychologically, traders either want to take profit or various exchange fees go up due to liquidity issues for longs to let go of some positions. It is most likely not because uncle Musk tweeted something random. Even if Musk tweet is the cause, it could only mean he is interested in buying more at a lower price and just took what others sold; which is kind of bullish if you ask me. In any case, guessing game aside, the momentum indicators showing signs of fatigue. The recovery from the dump was extra ordinary. The long hammer wick only suggests that there are demand into the prices below. Now, to ease up volatility price can move sideways to slightly lower or even retest the bottom of the wick to confirm support. Until price closes below 21 daily EMA, specially below 50 daily EMA, there is no change to the current direction. It is good to take some profits on the top of the channel and buy back at the bottom of the channel until something of substance changes. I am looking at the price action as bullish since this move has also negated the bearish divergence that has been forming for the past few weeks. Going sideways is probably the best thing that can happen right now. If price stays above 21 daily EMA and gives time for momentum indicators to reset, it will be back to climbing mode again. Maybe the Alts can get a second wind for a bit in the mean time. For now, I got my reloads and I have set stop loss, so I will be watching for something concerning to take place before taking any new steps.
