Unfortunately, we were unable to update our thoughts during the week. However, we are back now and would like to provide new insights into the market. In the previous article, we said that in order to confirm our thesis about the bear market rally (rather than a bull market), we would like to see a smaller volume in the second leg up (in the price of BTCUSD) than in the first one. In addition to that, we introduced a setup with two alternative triggers.
Since then, we have seen unimpressive volume accompanying the second leg up in Bitcoin’s price (one aligned with our thesis), followed by a bearish breakout below $24 258. At the same time, RSI and Stochastic have turned bearish, and MACD started to show signs of exhaustion. Furthermore, DM+ and DM- started to converge (if they perform a crossover, it will be highly bearish for BTCUSD).
This overall picture leads us to speculate that Bitcoin’s rally might have topped. To support this thesis, we would like to see (ideally) a pick-up in volume accompanying a further decline in the price. Additionally, we would like to see a breakout below $22 314 and then $21 376. With that said, we remain bearish and stick to our thesis that the bear market is not over for the cryptocurrency market, which is yet to see new lows. Accordingly, we maintain our price targets at $15 000 and $13 000.
Illustration 1.01
Illustration 1.01 shows the daily chart of BTCUSD and the setup we introduced in our previous idea with updated support/resistance levels. The yellow arrow indicates a bearish breakout below $24 258.
Technical analysis
Daily time frame = Bearish
Weekly time frame = Neutral/Slightly bullish
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Since then, we have seen unimpressive volume accompanying the second leg up in Bitcoin’s price (one aligned with our thesis), followed by a bearish breakout below $24 258. At the same time, RSI and Stochastic have turned bearish, and MACD started to show signs of exhaustion. Furthermore, DM+ and DM- started to converge (if they perform a crossover, it will be highly bearish for BTCUSD).
This overall picture leads us to speculate that Bitcoin’s rally might have topped. To support this thesis, we would like to see (ideally) a pick-up in volume accompanying a further decline in the price. Additionally, we would like to see a breakout below $22 314 and then $21 376. With that said, we remain bearish and stick to our thesis that the bear market is not over for the cryptocurrency market, which is yet to see new lows. Accordingly, we maintain our price targets at $15 000 and $13 000.
Illustration 1.01
Technical analysis
Daily time frame = Bearish
Weekly time frame = Neutral/Slightly bullish
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Trade active:
DM+ and DM- are still not confirming the top for the rally. In fact, they started to diverge again, which is relatively bullish. Therefore, we are highly cautious and will pay close attention to volume and price action tomorrow.
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