Bearish signs are worthy of our attention

Good morning everybody,

Current price action makes us think that chances to get some downside continuation are significant. We do not know the way that it takes - it might be just stop grabbing action below recent lows or real downside breakout and action to next daily 38.2K support area. But bearish signs that we have suggest that at least new challenge of current lows should happen.

First is overall market sentiment. Despite some deteriorating in US statistics - we see no inspiration as on FX as on Gold market. The same we could say about the cryptos. So, despite that recent factors, including ECB and Fed statements make dollar weaker - this doesn't add points to the rivals. So, markets stand not in very positive mood.

Second - in current action we do not see any attempt to play back the drop, no attempt to show the thrust up. It makes us think that market just reacts on strong daily support and oversold area, building an energy for challenge. Price action takes the shape of the pennant and price action shows signs of bearish dynamic pressure. Besides, don't' forget that this week we get CPI, Retail Sales and some other data that seems to be important.

This leads us to conclusion that it would be better to wait with taking new long positions for speculative purposes, as we easily could get the downside butterfly to one of the extensions, showing on the chart. Speaking about bearish positions - theoretically it is possible but the problem with the stop placement, as it has to be placed above 47K top that is too far right now. At it makes not very attractive short entry.

For accumulation purposes and investing, we think that current level could be considered for some increasing of coins reserves.