BTC had a little bounce from $7,650 until it met a strong resistance at around $8,400 where the downward trend line and 38.2 Fibonacci level have joined their forces to stop BTC. It has been moving sideways ever since with little volatility. If bulls manage to breach the $8,400 price, the next resistance line is the blue 25 EMA line at $8600-8700 price levels. Even if BTC manages to break these levels, it won't be long when massive selling begins and bulls pull back. It needs a massive volume and push to move the price higher and while bears are standing there to dump their holdings quickly, it seems unlikely. Therefore, given the momentum and market sentiment, there is little probability of the trend line breach. In case in happens, BTC will not go much higher.
The current price action also shows that both bears and bulls are not sure about the market. They are having a stand-off and looking for clues to make a move. However, the market is inclined towards bears than bulls.
On the other hand, a bear flag is being formed with the current price action. Bear in mind that any pattern is not valid until it is confirmed by the price action. The illusion of a bear flag does not mean that the price is going to move low until the price actually falls below the lower end of the pole which in this case is $7,650 with a price target of $6,500.
If BTC goes all the way to $6,000, then it would be a critical level to watch. BTC can make a double bottom there which would be a very bullish sign. You should know that BTC doesn't have to drop exactly to $6,000, it could bounce from, let's say, $6,500 or $6,800. A sudden spike in price and volume and other indicators can point that BTC has formed a double bottom. However a drop below $6,000 can wreak havoc and BTC will be in big trouble.
The fundamental analysis of BTC is very positive at the moment but technical analysis is pointing downwards price movement. Given the massive bull run in Dec, I think it is natural and necessary for BTC to establish it's bottom and then bounce all the way to establish a new all time high. As for now, we can only analyze and watch what the market decides.
For education purpose only. This is not a recommendation to invest or trade.
The current price action also shows that both bears and bulls are not sure about the market. They are having a stand-off and looking for clues to make a move. However, the market is inclined towards bears than bulls.
On the other hand, a bear flag is being formed with the current price action. Bear in mind that any pattern is not valid until it is confirmed by the price action. The illusion of a bear flag does not mean that the price is going to move low until the price actually falls below the lower end of the pole which in this case is $7,650 with a price target of $6,500.
If BTC goes all the way to $6,000, then it would be a critical level to watch. BTC can make a double bottom there which would be a very bullish sign. You should know that BTC doesn't have to drop exactly to $6,000, it could bounce from, let's say, $6,500 or $6,800. A sudden spike in price and volume and other indicators can point that BTC has formed a double bottom. However a drop below $6,000 can wreak havoc and BTC will be in big trouble.
The fundamental analysis of BTC is very positive at the moment but technical analysis is pointing downwards price movement. Given the massive bull run in Dec, I think it is natural and necessary for BTC to establish it's bottom and then bounce all the way to establish a new all time high. As for now, we can only analyze and watch what the market decides.
For education purpose only. This is not a recommendation to invest or trade.