What i said in my previous analysis:
What i think that can happen in a version, meaning we break the 6500:
- We don't see a increase when the 6500 breaks and the price starts to slow down around the 6600 and follow the pattern as we can see on the right
- We see that is much higher than the monthly average, than we should see the bulls push it towards the triangle target around 6800/6850.
The first one is the what has happened, low breakout. This has given the bears more confidence again because the bulls have not shown any real strength and conviction. No doubt, this is a very bad sign. This is something kept looking at through the corner of my eyes, because we had a lot of of these failed and weak break out attempts the past few months. But as you know from my postings the past week, i had more confidence this time because the alts were showing real strength again, something we had not seen in almost 4/5 months now. Meaning Alts moving up while Bitcoin' was going sideways.
The bears have taken over again because we see drops happening without any real bounces up, this can mean 2 things:
1) Bulls are to weak and the bears are simply too strong
2) The bulls are waiting for better entry price (around 6300) before they are willing to buy again. In other words, 6300 could be a .
So the momentum is not over yet, because the bulls have at least one important thing in their favor. That is the higher low AND the higher high on the daily as we can see in the chart. That means the bulls need to defend the 6300 because if that breaks, we have to assume the bears will attack the the 6200 low again from a weak ago. If that breaks, things can turn very badly. From the looks of it, that blue on the left looks to be valid, because we had a retest earlier this week and with that bounce we made that rally towards the 6600. At the moment we are again testing this support line. That's why this is a very important moment for the market now. Don't need to see a big rally right away, but i do want to see the bulls push back a bit. Meaning i want to see some bounces up from the 6300 towards the 6400 the coming days.
So if we see the bulls push back a bit from the 6300+ level, there is still hope for the market to move up again. Otherwise the chances will be much bigger that we will just continue to drop . The past few months we have had failed breakouts on both sides, so trapping bulls AND bears. It could just be that we will continue in that trend. Meaning we could see a break of 6300 and 6200 and see a bear trap around 6100 or whatever level and just simply move again to repeat the same pattern as we have seen the past few months. This sideways movement has been a fear of mine lately, but with the alts showing some strength i gave it a chance that things were changing. But so far this attempt has (almost) failed. For more info read my previous analysis.
There is one problem as well at the moment and i think it's quite significant, that is the funding rate on Bitmex. It has been quite high lately with rates around 0.05/0.1%. A half year ago this was no problem at all because the market would make daily moves of 5% or more, with funding rates getting even much higher towards the 0.375%. But nowadays, these low funding rates have become a big problem. Because nowadays for the market to move up 100 points it can take several days. So if you have a funding rate of 0.1% and it takes 3 days to move up 100 points. It means that the funding costs are 3 x 3 times 0.1% = almost 1%. At the current price that is around 60 points only in funding costs. This creates selling pressure as well because people holding longs try to prevent paying the funding AND of course there are people who short it now because they want to collect this funding. Because now it is not only because of predicting the direction of the market, but the speed of the movement has become just as important. When having questions about this, welcome to PM me or post the question in the comment section.
has been increasing a lot on Bitmex as well, could be because of the funding. If your a whale and try to do something here, this would be the ideal situation to lure in a lot of short positions, so they can get squeezed out of the market if they decide to push the market up at a certain point. That is what I would do if i had those funds :) Open intrest is not dropping on Bitmex, this shows that there are still buyers here. Now this is no information to trade on, because impossible to know for sure. It is just a thought, something to think about.
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So just wait and see.
If this wedge plays out, would fit my blue line from Friday perfectly. Showing another bounce up from the support zone.
For now, we could see a small drop to 6300ish again, but i want to see the price turn up their to form a higher low and THEN break the 6340. If we see that play out (staying above the 6300ish), we the bullish wedge will most probably be in play.
Mark price is the average price of bitstamp/kraken/coinbase.
When the price moves above or below it, shows a bit what the sentiment of the market is