After a nice bullish comeback, a logical move after a range reintegration, we have to ask ourselves what to expect, a final push before the dump? Or bullish recovery?
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Last week in review
We were undecided last week because we had just fallen below support and we had considered two scenarios. A bullish one in green and a bearish one in red. Well, the green one was chosen! Indeed, sentiment changed during the week, and selling on support did not impact a rejection. This allowed the range to re-enter, and when you do so, you usually head for the opposite terminal! This was achieved almost perfectly.
The question now is whether we’ll see a continuation of the uptrend, or just another bounce to the south!
The suspense is now!
Up, up, up!
Indeed, the preferred scenario would be to extend the bullish continuation, in which case we’d find a Bitcoin price close to $50,000 as we attack the next high points! On paper, this sounds very appealing, but it’s no guarantee of success!
To reach this objective, sentiment must be bearish.
And it is. We can see this from two criteria.
- The combo of long ratio (decreasing) and open interest (increasing) shows an increase in shorts on the side of large portfolios!
- The spread (which represents the difference between the perpetual price and the spot market price) is negative. This highlights players who are on the defensive. They are more bearish than bullish.
These sentiments need to be accentuated if the price is to continue moving in this direction!
Watch out for the fall
However, not everything is green or red, but nuanced! Here, the big risk is the zone we’re entering.
Not only is the price approaching the upper limit of resistance, and we can already see that sellers are showing their hand. But we’re also close to the 0.618 retracement of the downtrend which, as a reminder, corresponds to the sellers’ reload zone. This zone is generally the sign of the end of a cycle, in the event of a bearish return to this zone. We’d then have a very telling distribution structure (as was already the case last week) with a Wyckoff forming.
This does not bode well and would certainly herald the end of the rally for this year, before the bullrun resumes.
As you know, I give my opinion when I have one! I really like the structure of Bitcoin’s orderflow, which leads me to think that we’re going to get back to the top of the range and why not go and test the $50,000 mark! However, we’ll need to keep an eye on what’s happening in the altcoins as sentiment strengthens in this direction.
In any case, the trend is towards airdrop farming, so if you’ve been interacting with the various protocols, think about taking profits on magic money. You’ll certainly be able to get a good deal on other tokens/coins.
Have a great week and see you next week for more technical analysis!
Entrepreneur & Dad, passionate about cryptocurrencies, I describe for you the technical analysis. Cofounder of Cryptocademia, a free platform to learn all you want/can about blockchain ! Meet you there at https://www.cryptocademia.com
My job: look at charts and interpret them for you.
Beware, I do not know all the truths.