Historically it has been a very strong area, multiple times it has worked as a and as a . If we start to count those rejections (smaller and bigger) then we get 10(!) rejections from the blue area.
There is also one important factor which makes this area stronger. If the price want's to go through from it then it has occurred only with strong candles and there are 6(!) strong candles managed to push the price through the strong area! Every time when the price has reached into the marked area (blue marked area range: $7,700-$8,000) it makes something, so, here is the first conclusion - in this area, the long consolidation period is out of the options!
Let's talk about the direction after the breakout or after the rejection. There are 10 rejections and 6 breakthroughs. Three candles have made a breakout upwards and from there, two times out of three the price has got a bigger and a smaller rally:
- Breakthrough on 2017 November guided the Bitcoin price into the ATH (all time high)
- Breakthrough on 2018 April guided the price to the $10,000
- Breakthrough on 2018 July was a fakeout
So, we can do some math and we can say that a Weekly candle close above the $8,000 will be a sign that the price can go higher, at least two times out of three it has made a pump!
Things getting more interesting, as I said, we have got a pretty high numerous count of rejections BUT if the price approaching that $8,000 level as a resistance, then we have only ONE bigger rejection from it and the one mentioned fake out - on 2018 July, a candle close above of it and next week quickly downwards. The bigger rejection was exactly one week before the ATH breakthrough in November.
SUMMARY: This little overview and fifth-grade math will say that the price can take this level down but the sample size is not enough to say it "surely" and obviously, we need to wait for a Weekly candle close. In summary, if the price has approached this level from the bottom side then the breakthroughs and followthrough after that have been a more likely scenario IF this occurs but as said firstly the price has to close above the $8,000. The rejection is also valid because of the strong resistance which was in my previous post - below of this post.
"If you asked me to distill trading down to its simplest form, I would say that it is a pattern
recognition numbers game. We use market analysis to identify patterns, define the risk, and
determine when to take profits. The trade either works or it doesn’t."
– Mark Douglas
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