This market has spent a long time building supply, which appears in a chart as a weekly bear flag. The market could not break the highs as there was supply there and now we have size sellers coming in to close out the position. We will likely se selling right down to the bottom of the range. Look for smaller bear flags to enter short. If we have enough size selling then the long positions built up in the consolidation will be forced out causing a fierce selling wave that will probably take most by surprise. A first target would be one times the balance zone (current range) and second target 2x, so below $3000.
What would invalidate this scenario is a snap back up within this range, showing there is a lack of supply and the market will then move back to the top of the range.
What would invalidate this scenario is a snap back up within this range, showing there is a lack of supply and the market will then move back to the top of the range.