We have had a solid rally in BTC over the past month when it comes to price action but the main thing im weary of is the lack of volume.
This can be a classic retracement from the original drop back in May as we have had some seller exhaustion as the bulls took back over the game temporarily.
The price action could simply be a case of low liquidity, generally if there isnt a lot of volume or liquidity we will have higher volatility which is exactly what we have seen and now Bitcoin is sitting and a short term Supply block which is also the over head resistance from the range between 50 and 62k from earlier this year (Think darvas box theory).
Bear case is this resistance is strong and it was just a retracement from the original bearish trend and we either have a significant market correction back to the previous range high around 40-42k or worse case break that level and retest that 30k support possibly becoming range bound again and seeing a lot of alt coins bleed in sat value from uncertainty.
Bull case would see us chomp through this supply block and head back into the 50-62k range which could be a great bullish sign and confidence for people to get hungry again.
We have also seen the 50/100/200 daily ema all cross and align in a bullish trend which could give more confidence to the bulls (although these can just as easily cross back over so dont put the house on it)
For now im playing it safe as I'm already long and have hedged into a short position now waiting for the reaction at this level.
If we fail to break through ill leave the short open and look to manage position around 42k and re asses if we are going to drop low into the 30k range again.
If we break through this supply block invalidating my short ill close out and take the hit and continue to ride the long into the 50/60k range and re asses then.
This can be a classic retracement from the original drop back in May as we have had some seller exhaustion as the bulls took back over the game temporarily.
The price action could simply be a case of low liquidity, generally if there isnt a lot of volume or liquidity we will have higher volatility which is exactly what we have seen and now Bitcoin is sitting and a short term Supply block which is also the over head resistance from the range between 50 and 62k from earlier this year (Think darvas box theory).
Bear case is this resistance is strong and it was just a retracement from the original bearish trend and we either have a significant market correction back to the previous range high around 40-42k or worse case break that level and retest that 30k support possibly becoming range bound again and seeing a lot of alt coins bleed in sat value from uncertainty.
Bull case would see us chomp through this supply block and head back into the 50-62k range which could be a great bullish sign and confidence for people to get hungry again.
We have also seen the 50/100/200 daily ema all cross and align in a bullish trend which could give more confidence to the bulls (although these can just as easily cross back over so dont put the house on it)
For now im playing it safe as I'm already long and have hedged into a short position now waiting for the reaction at this level.
If we fail to break through ill leave the short open and look to manage position around 42k and re asses if we are going to drop low into the 30k range again.
If we break through this supply block invalidating my short ill close out and take the hit and continue to ride the long into the 50/60k range and re asses then.