Further to my last post, the Bitcoin chart is still looking weak. The moves higher are not convincing at all and fizzle out. It's only a matter of time before supply exceeds demand and we see new monthly lows in Bitcoin.
(Right-click and open image in new tab for full-size)
Follow this analysis on TradingView: https://goo.gl/p5CmHE
Looking at the 4 hour chart, price has clearly broken the consolidation zone and now testing the demand at the $8,000 key psychological level. More importantly, the area slightly above at $8,200 as mentioned in previous post.
This is also a great place to enter into a SHORT trade as there will be a lot of stop loss orders just under the round number of $8,000 that will be smashed on the way down should this scenario eventuate. This is one reason why I NEVER trade support and resistance zones.
If and when price reaches the area near the $7,000 level, it will be important to observe how the Bitcoin price reacts to this level. Any signs of a weak rally is likely to see a break of the larger breakout pattern (see lower trendline) which has been forming. The projected target should a break of this larger timeframe pattern occur is $5,350.
We must remember that the long term trend is bearish and you want to be trading with the overall trend. For a bullish trade to be considered, we must see a move above the $11,800 price as mentioned in previous posts.
Until then, short trades are to be favored.
Disclaimer: This is only my opinion, make of it what you wish. It is not financial advice.
