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At the start of this week, Bitcoin enjoyed a strong and fast rally, which ranges from a few $ 3,100 to $ 3,900 higher, in other words, a move that previously required market weeks, this time it was held in a few short days And now, at the time of this article, at the moment is seeing a refusal shortly after going through several levels of sheer resistance.
Figure 1: BTC-USD, 4-hour candles, Fibonacci retracements
Even if the market has recovered 25% in a few days, if we increase the zoom in higher periods of time, we do not see exactly the strong signs of bullish presence in the market:
Figure 2: BTC-USD, daily candles, Gravestone Doji
At this moment, sitting on top of the current rally is a "Gravestone Doji". A Gravestone Doji is an inversion pattern that represents a lot of intraday volatility that produces very little progress on daily candles. You can see the very tight body that represents little progress between the opening and closing of the trading session and a long wick that represents intraday volatility. It should be noted that this is only a configuration – it is not even a valid configuration until the market closes the daily candle. Which, again, is still open.
Looking back at the intraday chart, we can see that we managed to break upward from a bullish inversion model called "Falling Wedge":
Figure 3: BTC-USD, 4-hour candle, falling wedge
Unfortunately, however, we have achieved the typical price target for the Falling Wedge. This does not necessarily mean that we will have a quick reversal, but many traders who have played this reversal will profit from their long positions while eager bears jump on the opportunity of a potential downhill.
One last element to consider here is the volume trend. We still have to really see the capitular finality with the volume trend – which is typical of the strong and inexorable moves down:
Figure 4: BTC-USD, daily candles, volume trend
If we can do another test of the current support, the price is very low. And, if we can stop the current support, I expect that we can see a serious increase in volume to achieve long-term positions.
Summary:
- Bitcoin has enjoyed a 25% rally in the last days.
- At the height of its current rally, we see a Gravestone Doji setup that could lead to a bearish reversal.
- We are testing a known resistance on the Fibonacci Retracement values at 23%, but it does not seem to have the strength to eliminate it at the moment.
- If we end up testing and overcoming the current level of support, there is not really much to keep the price high, because we will have many enthusiastic bulls trapped and ready to liquidate any strong bearish move.
Negotiating and investing in digital assets like bitcoins and ether is highly speculative and involves many risks. This analysis is for informational purposes and should not be considered an investment advice. Statements and financial information on Bitcoin Magazine and on BTC Media sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or store. Past performance is not necessarily indicative of future results.
