Hello traders,
As you may recall from my previous analysis, Bitcoin needs to test around $3760-$3800 region before its potential bull run.
I shorted majority of my position at $4000, and I got very nervous when Bitcoin went above $4100 yesterday. I started to think that fake out from yesterday was exactly what marketed wanted to do: the feeling of "FOMO". I started to see many TA's talking about Bitcoin can go above $4500 after that fake out from yesterday and literally NO ONE was talking about the potential retracement. And there it is. Giant bearish engulfing candle stick that erased majority of the profit from last 5 days!!
Looking at 4 hour chart, we see that red-trendline is still somewhat holding as a diagonal support, and I expect Bitcoin to form tightening equilibrium from this point, because retest to $3874-$3900 is necessary for the next market movement. If we find resistance around $3900 region, we may need to test $3650 where we find confluent layer of support/resistance. I am still bullish on bitcoin in longer time freame because I see this giant potential inverse head and shoulders in the 4 hour chart, and this can't be ignored that easily. However, I will play bearish in next couple days.
Happy trading!!
As you may recall from my previous analysis, Bitcoin needs to test around $3760-$3800 region before its potential bull run.
I shorted majority of my position at $4000, and I got very nervous when Bitcoin went above $4100 yesterday. I started to think that fake out from yesterday was exactly what marketed wanted to do: the feeling of "FOMO". I started to see many TA's talking about Bitcoin can go above $4500 after that fake out from yesterday and literally NO ONE was talking about the potential retracement. And there it is. Giant bearish engulfing candle stick that erased majority of the profit from last 5 days!!
Looking at 4 hour chart, we see that red-trendline is still somewhat holding as a diagonal support, and I expect Bitcoin to form tightening equilibrium from this point, because retest to $3874-$3900 is necessary for the next market movement. If we find resistance around $3900 region, we may need to test $3650 where we find confluent layer of support/resistance. I am still bullish on bitcoin in longer time freame because I see this giant potential inverse head and shoulders in the 4 hour chart, and this can't be ignored that easily. However, I will play bearish in next couple days.
Happy trading!!
Comment:
Target reached! Now I am playing bull :)
1) Tightening equilibrium between $3772 and $3872 -> Bearish breakout.
The target for the bearish breakout is around $3400, but I would like to see Bitcoin to find solid support at $3670. I think this scenario is highly probable because Bitcoin has not tested 200 MA ($3622 right now) yet since the breakout from Feb 8th. This would be actually perfect because we can form micro head and shoulder pattern and test low $4000 again.
2) Retesting $4000
The probability of this scenario is somewhat low because I see a lot of resistances now and I feel like hype is gone after that big bearish candle stick from yesterday, but this could happen if Bitcoin can go above $3930.