A short-lived rally gave eager bulls false hope as the the market attempted to break back into the trading range (TR) outlined in last week’s BTC Market Analysis. As noted in our last discussion, a break back into the TR would be considered a period of evaluation and an inability to maintain support within the TR would likely lead to a continuation of the downtrend:
After establishing the Major Sign of Weakness (SOW), the market made a feeble rally and ultimately formed a Last Point of Supply (LPSY) at the bottom of the TR. The LPSY is the point where supply begins to overwhelm the market and long positions begin to close as the demand dries up. Shortly after the rejection of the TR, the market established a new low. However, this low was pushed on fairly low volume. The price action and volume are shaping out a reversal pattern called a Falling Wedge (FW):
If the price manages to break out of this FW it will have a modest $1,000 move upward. The measured move would have us retesting the lower $9,000s once again. However, if we fail to gain enough momentum upward, we would likely test the macro 61 Fibonacci retracement values:
If we manage to test the 61, this will again be a zone of evaluation as we wait to see how the market reacts to such strong, macro support.
Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.
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