When the price broke 42 000$ resistance, the nearest goal for the bull became MA200. It is a strong trend line that makes the difference between the bearish and bullish markets. As we can see the price reached this key line and now we see an attempt to break it. What does it mean for us?
1. If the price breaks MA200, the next target for the bulls will be 50 000$. It is a round number that also acted as a support before. I think from 50 000$ we will see a 30-50% correction of the upward movement from 30 000$ support. In order to be sure in this model, we have to wait for the close price of the daily candle and how the price will move further above MA200.
2. If we get a false breakout, it will be a bearish signal. The bears will be able to push the price back to 42 000$ support and the broken downtrend line. Here, we should wait for MA20 and MA500 which will be able to stop and reverse a downward movement. Probably after this correction, we will see a new attempt to break MA200 and reach 50 000$.
3. If the price bounces from MA200 and moves below the previous swing low, it will break the local bullish structure. I don't think it will be like that, because the price will have to break 42 000$ support and MAs. But we have to consider such an option too. If so, a downward movement will have the main target at 36 000$. A breakout below will open the road to 30 000$, the main bottom right now.
How to trade in these market conditions? I have no right to advise you what to do with your money. And I don't want to do it as well. You should have your own trading plan which matches your goals and you must follow it. If you don't have such a trading plan and you want to follow other people, it means you made a great mistake as a trader. Think about it!
All traders who have found their way ,believe in one motto:find your own trading plan!