After double bottoming around 5350-5400 after our recent slide through the kumo, we've had a nice generally bullish recovery to $5,800 today. News about Amazon possibly announcing they'll be accepting Bitcoin seems to be fueling the buying pressure. However, when one takes a look at where we are, there are some causes for concern that give rise to a potential short opportunity.
As you can see we have bounced off resistance created by the previous trendline from the bounce from $2,900. We are also crashing into the red cloud. Both Stoch and Willy indicate oversold and reversal situations. We also were unable to pump through resistance on Bitmex, when short sellers paid longs during funding. General buy pressure has been very weak and completely different than the pressure we saw when previously bouncing from $5,100 and $5,600 on the last corrective wave.
These are major bearish divergences. Right now we are bouncing between two huge trendlines created by the original dump from $2,900 and the breakout from $4,800.
If we do not bounce from the trendline at $5,500 and approach a new ATH then we will be in free fall heading towards channel bottom, which also coincides with prior support $5,100.
Targets: $5,530 & $5,100 (Make sure $5,100 actually holds before you start buying it)
Stop: $5,825 above the trendline from our ATH
As you can see we have bounced off resistance created by the previous trendline from the bounce from $2,900. We are also crashing into the red cloud. Both Stoch and Willy indicate oversold and reversal situations. We also were unable to pump through resistance on Bitmex, when short sellers paid longs during funding. General buy pressure has been very weak and completely different than the pressure we saw when previously bouncing from $5,100 and $5,600 on the last corrective wave.
These are major bearish divergences. Right now we are bouncing between two huge trendlines created by the original dump from $2,900 and the breakout from $4,800.
If we do not bounce from the trendline at $5,500 and approach a new ATH then we will be in free fall heading towards channel bottom, which also coincides with prior support $5,100.
Targets: $5,530 & $5,100 (Make sure $5,100 actually holds before you start buying it)
Stop: $5,825 above the trendline from our ATH
Trade active:
Short @ $5,774
Trade closed: stop reached:
In very Bitcoin fashion it did indeed break out of the lines. Stop reached. That's why there are stops in the first place.
You have to be very careful here, especially when Amazon hype is supposedly fueling this bump, that you aren't buying a false breakout before a major dump.