Purple - Local Resistence
Green - Monthly Open/Close
Red - Weekly Support/Resistence
Yellow - Trendline Support
Price was sharply rejected at ATHs, falling over $2000. This lends the chart an obvious bearish tone. From there, we've made lower lows and lower highs, as expected. However, price remains bid above 9k for now.
Are there clues of bullish continuation? Price fell below 9k yesterday to the 8800 area. This would have stopped longs out, leaving everyone expecting lower prices, before moving higher to retest 10k. This could constitute a false move downwards. Interestingly, we held trendline support today at the $9370 area. While these factors are not enough to assume bullish resumption, they do offset the bearish tone for now.
The Psychological 10k Mark
10k adds a psychological charge to the price action at these levels. If 10k doesn't hold, it is a sell? If we continue above 10k, is it simply too expensive? Many have sold everything, confident in a large pullback, while evangelists are calling for 40k. For newcomers, they may see the large selloff, and hold back from buying, whilst those who recently bought may lose their patience with something that has gone vertical for months and month. This confusion implies that neither bulls nor bears will be rewarded anytime soon, and an extended period of choppiness may be the order of the day. For such a polarizing asset class, this would confound everyone. Another scenario would be a slow grind up. All this, of course, is speculation.
Conclusion
We need to let the market show us what it wants to do. For now, a bearish scenario, or even a 40% scenario, has been averted and it looks like the market wants to build a launch platform around 10k. Soon, the price action will tighten and a clear pattern will emerge. Long scalps can be taken off recent lows, and short scalps off local resistance levels.
Green - Monthly Open/Close
Red - Weekly Support/Resistence
Yellow - Trendline Support
Price was sharply rejected at ATHs, falling over $2000. This lends the chart an obvious bearish tone. From there, we've made lower lows and lower highs, as expected. However, price remains bid above 9k for now.
Are there clues of bullish continuation? Price fell below 9k yesterday to the 8800 area. This would have stopped longs out, leaving everyone expecting lower prices, before moving higher to retest 10k. This could constitute a false move downwards. Interestingly, we held trendline support today at the $9370 area. While these factors are not enough to assume bullish resumption, they do offset the bearish tone for now.
The Psychological 10k Mark
10k adds a psychological charge to the price action at these levels. If 10k doesn't hold, it is a sell? If we continue above 10k, is it simply too expensive? Many have sold everything, confident in a large pullback, while evangelists are calling for 40k. For newcomers, they may see the large selloff, and hold back from buying, whilst those who recently bought may lose their patience with something that has gone vertical for months and month. This confusion implies that neither bulls nor bears will be rewarded anytime soon, and an extended period of choppiness may be the order of the day. For such a polarizing asset class, this would confound everyone. Another scenario would be a slow grind up. All this, of course, is speculation.
Conclusion
We need to let the market show us what it wants to do. For now, a bearish scenario, or even a 40% scenario, has been averted and it looks like the market wants to build a launch platform around 10k. Soon, the price action will tighten and a clear pattern will emerge. Long scalps can be taken off recent lows, and short scalps off local resistance levels.