We are experiencing yet another market correction, which once again split the market analysts and traders in two groups - some of them pointing to a bearish reversal while the rest were quick to calm the audience by drawing an unbroken market structure. As we all know, we cannot predict or foresee what the market will do, so as a successful traders we need to be reactive to a predefined strategies.
In December, 2017, during the last major bull market for Bitcoin, we saw a market structure very similar to the one we have now in April 2021:
As you can see, the bull trend was clearly broken by a consecutive lower highs and lower lowers on the daily timeframe triggered by a rejection near one of the resistance levels below the top, which eventually lead to a quick dive below the 21-day EMA on Weekly - a clear sign of a trend reversal.
Actually we saw the exact same thing back in February this year. The market, however, was quick to absorb the selling pressure, responding with an equal low and higher high on daily.
Switching back to weekly, the uptrend corridor and the short-term EMAs are all but impacted and could suggest a temporary consolidation instead of a market top at this stage.
What I would expect at this point is for BTC to face some resistance in the current zone around $56,000 and/or to re-test the $51,000 support area before attempting a breakout. A drop below $51,000 will practically mean we are in for a new lower low and potential market structure break.
The $56,000 line is the lower boundary of the old trading range with $59,500 as its ceiling. A short-term reversal attempt needs to go through breaking that level first, then surpassing the range high + the newly formed diagonal downtrend line. The move will open the door for a new higher high.
Regards,
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BTC is showing weakness here. Until the lower boundary of the range is surpassed, I won't say we are out of the woods.