Bitcoin Ultimatum - It Must Breakout Or It Will Surely Breakdown
Hello Traders, Here is my analysis for Bitcoin.
Let me start by saying that BTC is in a very precarious position. Heres why...
1) It's just barely above major support at $17.6K - If (most likely when) it breaks, there is no doubt that we will see massive capitulation. Potentially seeing a double digit % move down the day it breaks.
2) The descending trendline connecting the November highs to now will act as major resistance.
- BTC needs to break this trendline to have any hopes of a large rally anytime soon.
The reason that this puts Bitcoin in a precarious position is because it is trading in a larger wedge where both the descending trendline and $17.6K major support will soon converge.
*There can only be one of two outcomes in this situation:
1) Either we breakout
2) Or we breakdown
What do I think will happen?
- First off, I think regardless of whether we breakout or breakdown, BTC has not bottomed and will hit at a minimum $12K, but probably more like $8K.
- I think we could see a short term rally this week, potentially taking BTC up to the trendline to test it.
- Given the strong Bearish climate and weaker relative strength in BTC, I think it's unlikely that BTC breaks out of the trendline and will most likely get rejected from it.
What happens if BTC breaks the trendline? Won't that be Bullish?
- Yes, it would be bullish but for the short term.
- BTC would likely rally after breaking the trendline, probably back up to about $24K.
- But being as we're in a bear market, eventually the bears would take back control of BTC and short it into oblivion, back below support at $17.6K and lower.
***If BTC breaks out of the trendline, don't get fooled into thinking that the Bear market is over and BTC has put in a bottom. Smart money will be looking to trap traders in a scenario like this.
Why is this important?
- Essentially, no matter what, I'm bearish on BTC.
- This means that I believe there is a very high probability that ultimately BTC will trend much much lower.
- I'm preparing my shorts, I'm planning my trades, and I'm looking for the ideal entry for a short position which I will ride out below the $17.6K support.
Be Beary cautious in this type of market environment!
Thats it for this BTC post, thanks everyone and best of luck trading!
Let me start by saying that BTC is in a very precarious position. Heres why...
1) It's just barely above major support at $17.6K - If (most likely when) it breaks, there is no doubt that we will see massive capitulation. Potentially seeing a double digit % move down the day it breaks.
2) The descending trendline connecting the November highs to now will act as major resistance.
- BTC needs to break this trendline to have any hopes of a large rally anytime soon.
The reason that this puts Bitcoin in a precarious position is because it is trading in a larger wedge where both the descending trendline and $17.6K major support will soon converge.
*There can only be one of two outcomes in this situation:
1) Either we breakout
2) Or we breakdown
What do I think will happen?
- First off, I think regardless of whether we breakout or breakdown, BTC has not bottomed and will hit at a minimum $12K, but probably more like $8K.
- I think we could see a short term rally this week, potentially taking BTC up to the trendline to test it.
- Given the strong Bearish climate and weaker relative strength in BTC, I think it's unlikely that BTC breaks out of the trendline and will most likely get rejected from it.
What happens if BTC breaks the trendline? Won't that be Bullish?
- Yes, it would be bullish but for the short term.
- BTC would likely rally after breaking the trendline, probably back up to about $24K.
- But being as we're in a bear market, eventually the bears would take back control of BTC and short it into oblivion, back below support at $17.6K and lower.
***If BTC breaks out of the trendline, don't get fooled into thinking that the Bear market is over and BTC has put in a bottom. Smart money will be looking to trap traders in a scenario like this.
Why is this important?
- Essentially, no matter what, I'm bearish on BTC.
- This means that I believe there is a very high probability that ultimately BTC will trend much much lower.
- I'm preparing my shorts, I'm planning my trades, and I'm looking for the ideal entry for a short position which I will ride out below the $17.6K support.
Be Beary cautious in this type of market environment!
Thats it for this BTC post, thanks everyone and best of luck trading!