When looking at my chart you can see that bitcoin is trading in this huge huge which formed from the low in 2018 and the high in 2019, this is the actual predominant channel we are trading in and it had an unnormal corona-virus breakdown to the downside which you can see marked in my chart due to the corona-virus fears infecting all major global markets together and showing especially in bitcoin never seen before. Last week the bitcoin price recovered from this unnatural and highly volatile breakdown back into the channel where we are trading now and approaching this huge resistance. As we saw the last days the price already confirmed to the downside at the resistance and is now approaching it again.
What we can examine now is that bitcoin is building a possible range here, which will break either to the up or downside. When we are looking at the past breakdowns in the psychological 10.000 USD level we can see that as consolidation-range formed before the second key breakdown. Therefore we need to keep in mind that this can also happen in the range we are building now when bitcoin does not succeed to travel above the 10.000 and especially the 10.500 level. When considering the scenario a definite break of the 8100 levels to the downside will cause more pressure at least to the 7400 and this case the fact that we will trade again in the corona-channel will increase the probability for a continuation to lower levels.
In determining the scenario it is important that we need to take out the overall 10500 levels sustainable to the upside with good and otherwise it can still be a bull-trap catapulting bitcoin back in the range. The overall neutrality level which you see in my chart will be in play after this scenario and bitcoin has definitely more room to move higher in the structure when it confirmed. This can cause a new potential bull-market which will be in play and building a coherent set up with the overall structure but this needs to be confirmed with a clean break to the upside, the full confirmation will be in play when we exceed 2019 high you can see in the structure, I see many people calling for the moon but this is an illogical approach because we did not see a supportable confirmation and before that happens we cant call bitcoin for the moon.
At the moment we need to see if bulls are strong enough to take the 10500 levels out or fall back again. Both scenarios can be traded properly and as I always say it is preeminent to wait for the proper confirmation in the markets to place the best possible trade. In this case the confirmation will be realized on the side when crossing above the 10500 levels, this can be traded with an aggressive entry after the breakout or a conservative entry wait on confirming the level with a pull-back and the needed . The breakdown can be traded with an immediate entry or an entry after confirmation, in this scenario, it is also possible to wait for more downside and potentially add to the position because we will see definitely more downside when the 8100 level is broken.
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Information provided is only educational and should not be used to take action in the markets.