Lets take a quick look at the market action Bitcoin experienced since my last report.
We can see another attempt from the market to form a bullish channel since the previous brutal drop from the 7k zones. Bitcoin is giving many contradicting signals on the shorter term at this point in time. This reflects the sentiment of the traders and the news on the media. Some bullish, some bearish stories out there, I won’t give the fundamentals too much weight here.
We can see some good price action whenever Bitcoin has touched the bottom support zone and we are, again, getting higher highs and lows on the shorter time frame. We can see a nice little bullish flag/pennant formed after the price action the market experienced yesterday. This is over shadowed by the possibly scary bigger bear flag/pennant forming on the medium term.
On the longer term it is important to to note there is a BEARISH and BULLISH trend forming a massive triangle. This is normal as markets recover from “bubble” action and volatility gets less over time. Lets have a look.
On the 1 day chart we can clearly see the massive triangle that has formed as we enjoyed the roller coaster down from 20k at the start of this year. This is now a confirmed triangle and I would expect the prices to stay bound in this range untill a break to the top or bottom occurs.
Like I mentioned in previous reports, most trades taken here should be consider higher risk, as Bitcoin is still trending down from the previous ATH. I am looking to $6800 – $7000 resistance zone to signal the next possible breakout and leg up for the market.
On the flip side we could see a retest of the lower part of the triangle, but I would imagine it will only happen after the top of the triangle gets tested, around $6900.
I will look to $7000 as the main psychological resistance level.
Short term support at the moment is quite strong around $6650 at this point in time, with $6400 being critical for this little bullish run to continue. Safe trades.