Bitcoin (BTC) nicely tested the local support diagonal yesterday evening, which also forms the lower edge of the reversal structure in the form of a rising triangle. But in the end nothing came of it. Respectively, the rate suddenly poured down and now we are testing the same diagonal, but this time from the bottom. So what are the options now?
Current situation on 4H BTC/USD
The whole bearish structure is pretty tight on BTC. In the sense that it was no downward momentum. It is such a mishmash of candles that tells us that the supply side had more strength, but there is not such a striking difference. In short, there was some kind of defense. When Bitcoin came back after the breakout from the pattern, it was obvious that we were going to test that support diagonal. Which we expected, and the initial reaction to the touch was quite solid.
The touch candle closed into shape Pin new. The only problem was that the candle is seriously titer. That is also important perceive the size of those candles. When you have bullish or bearish candles, we know we need to watch the volumes. Volumes are the same for each candle strength indicator. However, the size of the candle is also key in the context of its shape and volumes. In order for everyone to fully understand, the ideal in this case is a large Pin bar with a long lower wick representing, for example, an 8% upward movement with large volumes.
Anyway, the rate eventually broke that diagonal down. And now the curve is being retested from below. So what are the options now? A continuation of the decline will most likely come after the retest. I have highlighted two areas. The first one is the minimum from the end of June. The second highlighted area is the June 18 low. And one of them can certainly be counted on to attempt a rebound.
Personally, I perceive the lower low as the most fundamental. So we will play about double bottom in the BTC market. If the double bottom doesn’t work out, we’re done. Then we can expect a parachute to 16,000 USD. Alts take a much worse beating, of course. Panic will begin again, as this will mean that Bitcoin has definitively broken the all-time high of late 2017.
In conclusion
With the latest breakthrough, Bitcoin definitely returned to the support zone. And we need shoppers to take advantage of that. When they take advantage of this, the supply side can run out on the current band. And that is the opportunity for a second bounce.
By the way, that euro-dollar parity was done yesterday. And exactly on the pip. Twenty years later, the euro was worth exactly one dollar. Over the past few days, the euro has also fallen sharply against the koruna. We will probably test the low from this February soon.
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ATTENTION: None of the information in the article is investment advice. The analysis does not attempt to predict future price developments. It serves exclusively as educational content on how to think about the market. Do your own research and analysis before making any investment, you always trade at your own risk. The kryptomagazin.cz team strongly recommends individual consideration of risks!
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