The importance of the current situation is that bitcoin definitely showed signs to the downside with the break of the 400-EMA that you can see marked in my chart in red but this breakout was not backed by a continuation, therefore, the price bounced back above where it is trading now and tested the middle-resistance-line of this huge you can see in my chart marked with the blue lines, as this middle line is normally a strong resistance in such type of channel bitcoin bounced back and now approaching remaining support levels in the local structure which it has at the 400-EMA in red and the middle line of the smaller channel it is establishing. These levels are important to hold for bitcoin to consider a possible continuation and break of the channel middle line which when it confirms properly can lead to a head and shoulder formation confirmation which you see marked in the chart.
At the moment bitcoin is building a decisive range 8870 and 9225 level here where it has to decide whether the range is strong enough to hold and confirm the head and shoulder formation properly or the bears getting back on the track again and pushing the price down. The head and shoulder formation will be confirmed with a clear volatile break of the middle line and continuation to the upside which can be tradeable with targets at 9600 that you can see marked in orange, on the side a clear confirmation below the 400-EMA, close below the support and at least a break of the lower boundary of bitcoins huge channel will confirm more pressure to the downside and end up in a decline. Although bitcoin is in consolidation and both scenarios are possible the scenario possibility is something higher than the as the market was oversold and still trading above important support.
In comparison to the rest of the market BTCUSD , XBTUSD , BTCUSDT is still the strongest pair in comparison to the rest altcoins where many already showed heavy declines and confirmation below the important support levels. This can indicate a possible paradigm-shift where we get sorting out of the weak coins and the good established strong and good digitalized projects survive, which is a similar mechanism to the dotcom-bubble in 2000 where just a few from the thousands survived sustainably and still developing. There are many people calling for the complete moon in cryptocurrency bitcoin as well altcoins but this is mere unrealistic at the moment as there are more than 1500 projects and sooner or later the best projects will rise to the occasion. Therefore we should be prepared on altcoins showing declines and only the majors holding strong in the near future.
In this manner, thank you for watching, support for more market insight, have a great day and all the best my friends! ;)
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Information provided is only educational and should not be used to take action in the markets.