I would like to give You a little update about the Bitcoin price movement.
Since the Double Bottom formation (24. Nov to 29 Nov.) we have seen that this pattern has failed and now we have a mini version of this double bottom .
The price founds a short-term bottom in 7. December. From $3,200 it got a pretty nice volume upwards and the 4H candle gave us bullish Engulfing candlestick pattern – this is a pretty rare case because it needs high volume to make a bullish Engulfing or bearish Engulfing . After the Engulfing price made a classic stop – lack of bullish volume consistency – and after the throwback it forms a sloppy double bottom or even a triple bottom. This bottom has an RSI Divergence on the 4H chart compared with the 25 Nov. low.
Nice pump upwards from $3,300 which guide us up to the known level $3,628. Old support starts to work as a resistance and from there we have slowly fallen down but this pump to the $3,628 completed our double/triple bottom pattern and at the moment we retest the pattern breakout area.
This black horizontal line marks the pattern retest area which will be a textbook example IF the price makes another “rally” upwards. Obviously, this is really hard because the down pressure is still there and we haven’t touched the $3k level.
To make any trades or to search for some opportunities to enter into the market with a sell or buy orders then we have to get some confirmations.
If You want to buy right away then it would be a mistake because we are on the massive downtrend and those counter trend trades are with very high risk. So, we need more confirmations if we want to see bullish movements.
Firstly we have to get a rejection from the current level which guides us above the semi-round number $3,500 and the candle have to close above the $3,550 which will give a just a little confirmation that the pattern should start to work and the price is again above the $3,500. This will be the first sign that the price may start to attempt to break the $3,628 level – the major short-term resistance level . From there, some trendlines steps into play and I will cover this in the update section if the price starts to reach into those levels.
As I said we need more confirmations to make any bigger short-term decisions. Buy trade is too risky because of the counter trend and the sell from current price level would be also a bit risky because we are probably on the bounce area. To make sell decisions we have to wait that this black line/chart pattern retest area will break and the candle has to close below the black line. There will be the first bearish confirmation and we have to start searching for some bearish entries.
Firstly a candle close inside the red box will give the pattern break and probably the price could make a retest $3,500 which will be a nice opportunity to make a sell and the bigger sell confirmation comes after the counter trendline break which will be discussed on the update section if the price starts to reach into the bearish area.
SUMMARY: Always are complaints why You put two scenarios. I put those scenarios because I don’t trade at the moment and I wait for confirmations. Obviously, currently You have to watch more closely bearish scenarios and searching some sell setups because there are no any bigger bullish sings and most important – the trend is your friend. We have found those small bullish signs here and there but buyers volume is just super low and they don’t have any consistency. Watch the price action and search opportunities after the price has reached one of those boxes.
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*This information is not a recommendation to buy or sell. It is to be used for educational purposes only!
Then, when I wrote this, the price has fallen below the black trendline but to confirm that we have to get a confirmation from candle close. If the 4H candle gets a close around this levels then it would be bearish confirmation but if the price gets a rejection and it gets a close above the black line it would be a small bullish sign. So, we have to wait and we have to be patient!
A 4H candle has closed and in one point it looked like we get a nice candle above the $3,500 but we didn’t because in this candle we haven’t volume at all not to mention bullish volume – another example why You have to be patient! Candle gets a close between the $3,500 and this black horizontal line which should be the retest area. The retest should be quick to be bullish but if it stays there for a while then it is not the best scenario. Still, nothing confirmed because we didn’t get a close in the bearish area either.
On the 15 min chart You can see that the price is on the downward channel which will indicate that we will go to test the counter trendline at $3,310-$3,330. It will be confirmed after new LL on the channel! Bullish break would be the break above the channel upper trendline!