BTC:USD 4 hour chart DAILY UPDATE (day 40)

Yesterday I remained fully bearish and was watching for a new local at to be created below $6,500. Today I have drawn a massive triangle which illustrates the support level that we have been flirting with over the past couple days.

If that breaks down below $6,500 I expect the volume to really pick up from the sellers. I have mentioned that I need to see capitulation before expecting this market to reverse and I am hoping to get it from $6,500 down to $5,000.

If not in a position I would wait for support to break as final confirmation for entry. Sell between $6,300 - $6,450 and set the stop loss $6,775. The profit target remains at $5,000 where I expect a lot of support to be waiting.

Comment:

Just saw that Shorts are at at all time high on Bitfinex. That is the most bullish thing I have seen in a while. It tells me we are likely to see a huge short squeeze that could break us out of the top end of the triangle.

Over zealous short sellers on high margin could be the rocket fuel we need to turn this thing around without capitulation.

I am still cautiously holding onto my short $7,300 and keeping a tight stop.