We saw a penetration of the lower support in January followed by a few days of testing. The test resulted with a retest almost to the same low as the actual spring .
In Bitcoin's recent price action we saw a huge spike in demand on the penetration of lower levels although the rally has so far failed to materialise into the recent daily capitulation down bar. Whilst this does look we know that the demand is aggressive at the 28/29K area.
Could it be we are in another complex spring type action similar to that of January's? Where we see testing go on for a few days giving the impression of weakness. A low liquidity weekend could be the catalyst that takes us down to test this recent low of the spring type action which could then lead to a successful rally and assault on 40K resistance.
This could be a very reliable trade set up with a favourable risk to reward ratio but do keep in mind the reversal could be a failure of the spring where see a plummet below support and down into the 20's.
I would recommend any entries to be taken on the sign of strength bar after a successful retest.
Remember to always manage your risk well.
Now we need to hold this trend upwards to validate the spring. Higher volume from demand would be more assuring
Do make sure you enter on bar thats shows strength and manage risk well! I will be sweating this one with you!