Hi friends!
Since my last analysis, BTC dropped $900, so it's time for a reevaluation, even if my first downside target of $2400 has not been met yet.
BTC has stopped falling after it reached $3300 and is currently consolidating in a bear flag (in purple).
However, I think we might see a short spike to the upside, before BTC continues its decline, to wipe out some shorts. As you can see at the bottom, on Bitfinex the number of shorts exceeds the number of longs by 12500 BTC. Bitfinex (and probably some other margin-trading exchanges as well) would loose quite a bit of money, if the number of shorts stays this high while BTC continues its decline.
I think a potential spike to the upside could re-test the descending trendline (in white) that BTC recently broke, to confirm it as resistance. The spike might as well re-test the 50 EMA (in orange) or the $3640 level, or maybe even $4000, depending on what is needed to wipe out a lot of shorts. This is why i would be very cautious when shorting BTC at the moment.
To wrap it up, my mid-term downside target remains $2400, but I think think some short-term spike to the upside is likely.
Cheers!
-Znarfomat-
Since my last analysis, BTC dropped $900, so it's time for a reevaluation, even if my first downside target of $2400 has not been met yet.
BTC has stopped falling after it reached $3300 and is currently consolidating in a bear flag (in purple).
However, I think we might see a short spike to the upside, before BTC continues its decline, to wipe out some shorts. As you can see at the bottom, on Bitfinex the number of shorts exceeds the number of longs by 12500 BTC. Bitfinex (and probably some other margin-trading exchanges as well) would loose quite a bit of money, if the number of shorts stays this high while BTC continues its decline.
I think a potential spike to the upside could re-test the descending trendline (in white) that BTC recently broke, to confirm it as resistance. The spike might as well re-test the 50 EMA (in orange) or the $3640 level, or maybe even $4000, depending on what is needed to wipe out a lot of shorts. This is why i would be very cautious when shorting BTC at the moment.
To wrap it up, my mid-term downside target remains $2400, but I think think some short-term spike to the upside is likely.
Cheers!
-Znarfomat-