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This Week in BTC
My cautious optimism on the bullish side of BTC is further waning this week as the bearishness I discussed last week has continued to develop confirmation. The potential daily M has now been confirmed, albeit with only a couple tails dipping down below the breakdown level. TRi indicators are also now flashing bearish signals with M structure in OBV, MACD and RSI all confirmed. While we did put in a W in price a couple weeks back, the bulls never stepped up and it couldn’t get going in earnest and we’ve seemed to rollover for the time being. Volume continues to be weak on both the bull and bear sides so I think we’re still very much in the summer doldrums without that much trading activity. When price is stuck in a range like this and flipping back and forth between bull and bear, I think it’s really difficult to get an idea of when a breakout is coming and in what direction. My gut tells me we’re in the type of situation where the whales are lulling the public to sleep while chopping the market back and forth to wash out weak hands. When enough people are flushed out and no one else is paying attention we can expect the move to come in.
For the past few weeks I keep pointing out that price is still sitting up above the Reload Zone and I’m still looking for a move at least down to the 61.8 fibonacci level at around $27k. Now I’m seeing a potential AB=CD pattern that would take price down to $24k and considering the bearish signals in the indicators that I mentioned above I think that a case can be made that bearish trend continuation setups are coming in. In fact we’re seeing a setup we teach in our Level 1 School Program called the BoT. The setup is short from $33.5k with a stop at $33.6k high and the target is the ABCD at $24k. This is how the setup looks on a 4hr chart:
This bearish setup will take some time to play out but at the moment it looks valid. If sentiment changes and we start putting in bullish structure then we can consider this off the table but for now it looks plausible and there doesn’t seem to be much in the way of Bitcoin coming off here. I can’t stress enough how often we have to test Reload Zones before bottoming and I don’t see anything different about BTC here. Ideally we would get a “rip the band aid off” move where Bitcoin quickly dumps down into the RLZ so we can set up a bottom for the next move higher. Only time will tell they say and either way we’ll be watching closely and staying on our toes. If you’re looking for more in depth analysis on BTC and crypto join us on the site for daily content.
#pmaftw and happy trading!