Bitcoin Bulls Getting Nervous?

COINBASE:BTCUSD   Bitcoin / U.S. Dollar
After another face melting rally in the stock market, the cryptocurrency markets again traded sideways. Is it me or are crypto markets becoming the more rational and less emotionally traded market? Probably not. Crypto, however is my favorite leading indicator and to be honest it'll let us know whether the markets are going parabolic or could be tamed in the near future. Let's take a look at the shorter time frame picture of Bitcoin .

Interesting Price Action

Since its low around $8900, Bitcoin quickly ripped out in what seemed like a "falling wedge ." Below you see the approximate target.

Why this wedge is interesting is because I suspect this actually may be a leading diagonal of some sort. See below.

Again, for leading diagonals you like to see wave overlap. What is one way to decipher this? Price action post diagonal. At the moment Bitcoin is consolidating. Lower time frame analysis will show that the current pattern is suggestive of a corrective ABC . See below.

Notice the 5 wave move up and now we are correcting sideways. They call these ABC Zig Zag patterns.

So..yes I am bearish . But before we end here lets look at the bigger picture and where to go short if needed. Below I highlight a two levels of resistance. I would not be short here as there is a high probability Bitcoin retests resistance #2. The optimal entry for a short would be at the resistance #2 region.

I have a long term strategy for Bitcoin and that is not to get fooled for over eager bulls. I have a belief that this time around trading Bitcoin will not be as easy as it was in 2017. With that said, technically the Bitcoin chart is vulnerable to more downside especially if it cannot get beyond $10,000. Bias: Bearish.


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