Bitcoin has maintained a position above an ascending trendline beginning in November, at the bottom of the last correction before the December bull run, hitting the prior two lows at ~5900 and ~6450.
It has been in a descending channel for weeks, and traders have speculated on the possibilities of <6000 pricing. I see no rationale to support this until the bottom trendline is broken. The strongly bounce from ~7050 at the trendline to above 7400 today is promising, but we need more validation before we can safely assume the correction from the ~9950 high is over. We need a higher high -- above ~9950 -- before we can say the correction is over. A new high above 11,700 would signal we are in a bull market and aggressive long positions might be sensible.
A breakdown out of the wedge would signal a decline, and a breakdown from the wedge and the descending channel would likely signal accelerated selling. That's the scenario where <4000 is not only possible, but probable. In this scenario, aggressive short positions might be sensible.
While in the wedge, bulls and bears should assume a neutral position, where bulls might hold a long spot position and bears might sit on the sidelines.
It has been in a descending channel for weeks, and traders have speculated on the possibilities of <6000 pricing. I see no rationale to support this until the bottom trendline is broken. The strongly bounce from ~7050 at the trendline to above 7400 today is promising, but we need more validation before we can safely assume the correction from the ~9950 high is over. We need a higher high -- above ~9950 -- before we can say the correction is over. A new high above 11,700 would signal we are in a bull market and aggressive long positions might be sensible.
A breakdown out of the wedge would signal a decline, and a breakdown from the wedge and the descending channel would likely signal accelerated selling. That's the scenario where <4000 is not only possible, but probable. In this scenario, aggressive short positions might be sensible.
While in the wedge, bulls and bears should assume a neutral position, where bulls might hold a long spot position and bears might sit on the sidelines.
Trade active:
I have exited my spot position and have opened a small margin short on the basis of a weak breakout. I will monitor these positions closely, however, as I consider this situation to be uncertain.
