- Bullish vs. Bearish - 30%30%
- Probability - 65%65%
Over the past two weeks Bitcoin hasn’t done much other than trigger stops on leveraged positions on both long and short positions. The range between $3400 and $3800 has formed as a result with extended wicks occurring near each level.
This uncertain price action has not offered much clarity to the direction of Bitcoin and whether it’s in consolidation amidst reversal or continuation of the downside from $6000’s. What’s pushing the narrative towards the bear scenario is lower highs on the upside wicks, absence of volume and the developing formation of a descending triangle pattern.
As you recall, the massive downward move that ensued from the $6000 level was in the midst of a descending triangle that formed from the highs of $20k in early January, 2018 and the low $6000’s that acted as support throughout the year. The price action over the last two weeks or so looks eerily similar to that of 2018 just over much smaller time frame.
As Bitcoin continues to hover around sub $3600’s and registers lower highs, the likelihood of a violent move downwards increases. If today’s daily closes the way it currently stands as an inverted hammer going into weekly close, we are expecting breakdown of support and retest of 2018 lows at sub $3200 a foregone conclusion.
However, if volume does come in and Bitcoin manages to get a close above $3700 today or tomorrow before the weekly close, the bearish scenario will most likely be invalidated at least for the short term.