Yesterday i proposed 3 different pathways for BTC from where we have been. Today we can see that we got a lower low on 4 hour chart which shows us the correction is in progress and likely to follow scenario "C". We got confirmation with long upper wicks on the candles, showing a lot profit taking. A third confirmation is the bear cross of the MACD shown in the yellow box.
As the correction just started, its very hard to draw a pattern. We dont have enough touching points so far. A likely scenario is shown in the bull flag until we get further confirmation.
BTC can retrace between the 0.236 and 0.883 but the most common one is 0.618. In this case here we get a very strong support at 6,850 which is close to the 0.5 fib level. Its unlikely that we going to break below but for BTC its likely to confirm the broken resistance as support, meaning we can go all the way back to touch 6,850 before turning around.
We can see so far a very healthy correction as volume is declining. When we spike like we have done in this bull move, we have to have a correction. I said many times to the folks following us: "No one gets broke taking profits!" Its part of risk management!
BTC has broken marked structure when got above 6,850 usd. That we not gonna break the next strong resistance at 7,800 in one go was quiet foreseeable for many ppl. Thats why ppl got out closer to 7,800 as i had shown. We got up till 7,600 but in my target area for protecting my profits.
I don't see any reason to be concerned. The next bull run is very close.
Checking the long and short comparison in the 4 hour time frame:
Even here we see no reason to be concerned and it fits to the overall picture. We can see that the long dropping a bit as they have closed the contract at the top of the bull move, but they didn't went bearish. So we see a little drop here. The shorts taking a much harder drop, showing us that no one believing in a bear move.
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