Is Bitcoin Done Already or Setting up for The Next Wave Down

We had some bullish movement on Sunday and the bulls had the reversal in their grasp, if they would have broken the 4100 and closed the daily candle at 4300/4400 that day. There was even a big bull flag in the making around that level which broke up but failed completely and simply took the price down again because of that weakness and resistance level of 4100.
Now we have tested the low around 3500 once again and there are a few scenario's now.

A) Double bottom pattern, this would mean we have to break up soon and move towards the 4100 again, break that turning point and move towards the 4600/4700
B) Big triangle (on the right), we break the small triangle on the downside and simply move down already.
C) Big triangle, we break the triangle on the upside and follow the blue line and turn down again to complete that big triangle. Even if we follow this path and complete the triangle, there is ALWAYS a chance for a break to both side. But in this setup/stage the bearish is much more likely of course and the bearish sentiment says the same.

At the moment there is a clear upwards trend line from the low the past 12 hours, which forms the support line of that small triangle. This one is the first one which can tell us what the game plan might turn out to be. At the moment it is already at it's support level. So we might already get an answer the coming few hours of which game plan will turn out.

Yesterday i mentioned that we should still see another wave up to complete an ABC correction. This one completed at the 4100 already, but that is the lovely thing about EW wave's, it can simply be part of just an even bigger ABC correction. Meaning yesterday's ABC was just wave A, wave B is done and we should be in wave C (scenario A from above, the double bottom).

The bearish movement has been a bit extreme and there is still panic in the market, that is one thing that is sure. We are not seeing movement that show the market has adjusted to the current prices and is looking at % movement. No it's dropping 10/20% a day because we still move in those 300/600 points movements, so the market has still not adjusted to the current conditions yet. This will probably stay like this until we see that real aggressive push back from the bulls with big short covering, making a 20/25% recovery from the low in one day.

While i am writing this, that trend line already broke and we are dropping towards the low again. Which means the scenario A is probably off the table already, unless we see it move back up to the 3800 within a few hours. So there is still a 30% chance for that version to be in play. If the 3500ish breaks, with high volume than we should just continue to drop even more. If we don't see high volume, there might still be a chance the support will hold.

When looking at the Alt coins, most show similar patterns so nothing clear to go on those. Expect the fact that of course that in general they all look very bearish and weak.

I usually try to give my preference, of what scenario i think might play out. This time i don't have an opinion yet. Rather see some more movement play out first. We have at least very clear levels to watch now on the bigger picture, which is the 3450/3500 and the 4100. For the short term, we already broke that trend line as i mentioned, so if we don't see a move up again above 3750 very quickly we will most probably drop towards that 3500. So for now i can say, bearish scenario's are most likely to play out, unless we see the 3600/50 hold and see a move up within 2 hours or so again above the 3750. So for me it's just watching to see how things unfold first before i start to trade this.



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Previous analysis:

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So the break of that trend line and currently moving inside this small bear flag. So most probably just see a move down again. Unless we see that quick move up above 3750ish as i mentioned above, making this a small bear trap move. But going down is most likely.

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The bear flag is almost getting invalidated already. A push above those red zones would confirm it. Usually if we see a bear trap we see a counter move. Meaning we could be moving up. But it's just a small bear trap, so it could mean it will only move towards the 3700/3720.

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Just when everything starts to turn into crash mode, alts and Bitcoin, we get a 150/200 points reversal candle. Probably just to shake out most of the leveraged short positions. But still below the 3750/3800 so this could still be nothing more than a small shake out.

I was just about to write, that normally it's too soon to break the 3500 low, because usually we see the big triangle from the original post play out rather than an immediate drop. All of a sudden this move up happens, out of nowhere.

Looks like it's just a shake out, but could potentially also be that move towards 3900 to complete the big triangle. Still watching to see what happens. Only a (normal) break of 3750ish (so not a 2 second wick) could mean the 3900 might still get tested.

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This also means the big double bottom is still in play, but than we need to see a move towards the 4000 before the daily close (14 hours)

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Funding on bitmex is 0.21% for shorts in 25 min from now. This could give a a bit of upwards pressure. Because for people who trade with 10x of their balance, means they pay 2.1% of their balance. But usually after the funding settlement ends, the normal direction gets chosen again.

The current squeeze we just had, formed a bull flag which has already failed. We have seen these 200ish point squeezes many times already the past 2 weeks, almost each one of them has failed so far. Something i showed in a previous analysis. Looks like a repeating pattern, moving identical each time

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Bulls making another attempt, but got rejected at the same spot again. If that red resistance breaks we could move higher. But from what i can see now, it should make a good jump towards the 3850ish, to prevent a possible bearish wedge forming.

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At the low just now around 3660, there were some big sell walls on Bitmex. But as i have noticed the past months, people are ignoring those fake walls. Of course still people who react on them. So i am happy to see that these attempts to manipulate the price are getting less significant

But funny to see how the price moves up 80 points AFTER those fake sell walls. There is a fight going on on Bitmex, because there are some very big buys happening there, but still below resistance. So it seems it is still not enough, but of course i have no idea how much more ammunition they have left

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Seems the wedge has turned into a triangle now. Because these moves up have reached the high each time. In other words showing some buying power going on. This doesn't mean it's ready to move without a doubt, but it is shifting from bearish momentum to neutral now IMO. So unless this triangle breaks on the downside, i assume we will move up. Maybe those big buyers i mentioned above are going for it

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The longer it takes, the less likely it becomes the triangle will break up

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Look like a failure already, was taking too long and now we could see a retest of the low again, assuming the triangle was a real one. That strange support was around 3660/50, so don't know if the same buyers might step in again. A lot of noise on these low time frames now.

Think the 3600ish is an important level to watch and the 3750 level i mentioned a few times before.

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Seems we have a breakout of this bigger triangle, however it's a small lame breakout. Even more important, the volume is very low as well!
So i expect at least a pullback to happen. Normally it should stay above the first green support level (left chart) but a break of the second one would mean it will most probably fail and could see a countermove to the downside with a target much lower below 3500.

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Alt are giving it a try as well, the setup is there now, to make a bigger correction up. As we can see here, most are close to the descending trend line from a week ago AND most show a higher low as well. That would mean that Bitcoin might even go to the 4300/4400. That would mean, the bigger ABC correction i mentioned in the analysis, could still work out. But we need to see more volume.

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Already loosing it's momentum, so chances are decreasing

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With Bitfinex we can see it's already against that resistance of that triangle. Something Bitstamp has not reached yet. But it could be that IF Bitfinex breaks it, the acceleration could already start. Maybe that explains the lame breakout Bitstamp has made so long

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Anything can still happen, but the daily reversals are probably off the table. As long as Bitcoin stays above the 3740, it could still work out. If we drop below it, we would have a small double top at 3840.Those 2 green supports could still work out, but these "second" support levels usually don't work after a (possible) failed breakout. We need more volume if it wants to move higher

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Target reached :), volume increase (not very big though), possible bull flag now. Double bottom play is is in full play now. Against the resistance, so there is a chance for for prices of 4600/4500 coming days. But these levels need to hold, 3950ish.
Current movement is a bit similar as Sunday, making a decent bull flag, breaking out but making a lower high. So best case it stays above the 4000/3980, but the 3950ish could also still work out.

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Talk about identical moves, this is the only thing that can make it fail. Making a similar move as Sunday

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Fake sell walls on Bitmex again, trying to push price down, or trying to keep it down to close shorts or fill longs. Don't know which one of course. Because as soon as we move up they disappear like little B's. Here we can see, that price needs to get above 4000/4010, to make this bullish version alive again. Otherwise this small fractal from Sunday might play out again.

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OI has dropped 5 mil the past hour, so that does say shorts decreased already

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No they changed the sell wall from one 10 mil sell to 4/5 2 mil sells and one 4 mil sell. They just disappeared once again. Like their getting desperate, changing their order sizes. 3950ish still holding, but it really needs to get above the 4000 soon!

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If this starts to take too long, we might see a retest of 3800/50 again. From that point on it could still make another attempt. At the moment it's still inside this bull flag against the resistance, so the setup is there to move up, will depend on how much buying volume there is. So far not enough yet

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Getting very similar to Sunday again. Buying volume is decreasing so the bears might take over. Think if 3950/40 breaks, we might be headed towards testing the 3800/50 as mentioned above.

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If bulls can keep it against the flag resistance now, it could be a matter of time until the flag breaks.But if the flag breaks, need to see volume increase and see a 150 point squeeze at least, otherwise below 4100 is still resistance.

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TA has worked a bit on open longs/shorts of Bitfinex. I have been looking at this potential bearish wedge of the open shorts. Could mean a short squeeze might happen soon. This is nothing to trade on, just nice to watch and learn. Would fit the bullish picture i have in mind for Bitcoin though :)

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New Bitcoin analysis: