Just a quick short term chart. I think that if Bitcoin can continue pushing up here through the short term downtrend, we could actually see some more buyers come in, since the potential for further downside will decrease. In that case, price could shoot up quickly even towards 8.5K (green X, confluence of resistances). Obviously if we shoot past that on a volume surge, we could even test the 9K resistance again. However, volume is still very weak. A continuation of the short term trend is also possible, meaning that we could see a drop towards the next support, around 7.2K (second red X. First red X target was already hit). Depending on how price and volume reacts if we reach that point, we will have to assess whether or not we've seen the extent of this correction.
Zooming out, you can see that we're still in the light blue bullish channel. Based on this, a longer correction becomes more likely if we break the 6.8K-7.2K support zone. If the channel support holds, I think the uptrend will likely continue after some consolidation. You'll see on this chart (and my recent posts) that I have three different scenarios that I think are possible. One has us blasting straight through the channel and onwards to 50K+ in a short timespan. The second has us bouncing along within the channel until it's eventually broken during the next blowoff phase. The third has us dropping out of the channel and testing the lower rising support.
This is not financial advice. Just a quick chart for personal reference and educational purposes.
-Victor Cobra
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Volume continues to decrease, which indicates lack of demand at current prices. This could be further indication of a drop to the prior 6.8-7.2K support zone, as mentioned above. A potential flag/channel support exists around $7550-75560 at present. If that $7500 support fails to hold, odds of 7.2K or lower will continue to increase.
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Flag is breaking down and testing the $7500 support.
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We’re still trying to break out of the short term downtrend. If we do break out, this price action will begin to look a lot like the reaccumulation in the low 5K area in April, except on a bigger scale. This will then increase the odds that I’ve been right in assuming some further upside, especially for altcoins.
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After breaking out of the short term downtrend, Bitcoin has tested it as support a couple of times, with each dump on lower volume. This could indicate seller exhaustion. Additionally, the uptrend supports (light blue lines) are inching closer and closer. Those should ideally hold (at least on the weekly timeframe) if Bitcoin is going to continue higher. Otherwise, we will probably have to test some lower levels, and bigger sells might start occurring.
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Here are the important lines to watch now (orange). Long term bullish channel support is in light blue.
Great Setup following you now :) , I have a short position running on BTCUSD right now what do you think?
VictorCobra
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@DACapitalTrading, thanks for sharing. Given volume, it doesn’t seem like dip buyers are that confident at the moment. However, shorting between 8K and 9K and closing around $7500 would have been a good trade. Could reopen a short if it goes below $7400 to target $6800-7200, but there seems to be some natural demand at current levels, despite low buy volume.