Following from my correct short call last Friday, I suspected a head was forming based on the lower volume on the higher high we made. Thus far, it looks like the signal is close to completing. Notice the higher volume on the sell side after the head formed. In addition, we broke strongly through the support established during the formation of the left shoulder.
Currently, I believe the right shoulder is now forming. We are on very weak volume, which is coinciding with how head and shoulders typically play out. The next step is another high volume selloff and a break below the support at the 8200 level. From there, a good buy point is at the 7600 level or so, which was a pretty decent resistance some weeks ago.
The halvening has happened, yes, but for the next cycle to truly begin we need lots of demand, which I just don't see the appetite for at the moment with the events going on in the world. At least here in the US, we have a major deflationary event going on. The dollar has been rallying strongly, which puts downward pressure on this asset from US speculators. To take advantage of the decreased supply, we need the demand to meet that, and I just don't think it will begin to happen until we recover from the pandemic. With the savings rate increasing and consumption decreasing across the world, these deflationary pressures will increase the strength of fiat currencies in the short term, which will strain Bitcoin, as it is a hedge against inflation. That won't play out until the economies begin to recover and we start to feel the effects from all of the massive printing.
Good luck out there.
Currently, I believe the right shoulder is now forming. We are on very weak volume, which is coinciding with how head and shoulders typically play out. The next step is another high volume selloff and a break below the support at the 8200 level. From there, a good buy point is at the 7600 level or so, which was a pretty decent resistance some weeks ago.
The halvening has happened, yes, but for the next cycle to truly begin we need lots of demand, which I just don't see the appetite for at the moment with the events going on in the world. At least here in the US, we have a major deflationary event going on. The dollar has been rallying strongly, which puts downward pressure on this asset from US speculators. To take advantage of the decreased supply, we need the demand to meet that, and I just don't think it will begin to happen until we recover from the pandemic. With the savings rate increasing and consumption decreasing across the world, these deflationary pressures will increase the strength of fiat currencies in the short term, which will strain Bitcoin, as it is a hedge against inflation. That won't play out until the economies begin to recover and we start to feel the effects from all of the massive printing.
Good luck out there.