Beautiful Short Opportunities if This Happens in Bitcoin! (BTC)
Hi friends! Welcome to this update analysis on Bitcoin! Let's get right to it. Looking at the hourly chart, you can see that BTC was able to break above the pink dotted trendline that was featured on the last analysis. If you recall from that analysis, I was not very optimistic about upside trading there, because of the high amount of overhead resistance. I wrote going long on a breakout above the pink dotted trendline "is a risky trade, because there is a lot of falling overhead resistance." Looking at the chart, we can see that BTC produced a strong breakout above the pink dotted trendline, but ran into powerful resistance at the midline of the channel (dashed blue trendline.) Since then, BTC has rolled back over, and it appears to be moving in for another test of the bottom of the uptrend channel. If the uptrend channel is broken, BTC will fall towards the recent lows around $3675 — likely resuming the fall toward $3000. On the other hand, if BTC holds inside of this uptrend channel, and particularly if it breaks above the midline of the channel, we could see a quick rise toward $5000.
Keep in mind that we are looking at the hourly time-frame. On the daily chart, this action looks much more like a big bear flag. Interestingly, the bottom of the blue uptrend channel is the bottom of the potential bear flag on the daily chart. So, if the bottom of this uptrend channel is lost, the bottom of the bear flag on the daily chart will also be lost, which will make a visit to $3000 extremely likely.
So, keep a close eye on the bottom of this channel. If it breaks on high volume, and especially if price returns to confirm it as resistance, that would be a powerful sell signal that could produce some fast and easy gains for the shorts. With that said, the bulls need to defend it with all of their might.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Keep in mind that we are looking at the hourly time-frame. On the daily chart, this action looks much more like a big bear flag. Interestingly, the bottom of the blue uptrend channel is the bottom of the potential bear flag on the daily chart. So, if the bottom of this uptrend channel is lost, the bottom of the bear flag on the daily chart will also be lost, which will make a visit to $3000 extremely likely.
So, keep a close eye on the bottom of this channel. If it breaks on high volume, and especially if price returns to confirm it as resistance, that would be a powerful sell signal that could produce some fast and easy gains for the shorts. With that said, the bulls need to defend it with all of their might.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Comment:
Note: The bubbles on the chart are supposed to say "Test."
Comment:
As anticipated, price has broken down sharply below the uptrend channel, on high volume, with expanding sell-side momentum, and is currently in a bearish consolidation below the channel. From here, price is likely to continue it's breakdown, testing the $3657 level. It is possible that BTC could rally back up to the bottom of the channel, to test it as resistance, but the most likely forward path is a continuation lower.
