As we can see on the four hour chart, BTC has managed to rally off of Wednesday's low. However, the BTC rally appears weak, in comparison to the rest of the crypto space. As I said in my last BTC post "Possible Dead Cat Bounce in Bitcoin! ( BTC ) MEOOOW!" many of the other cryptos have rallied to their significant overhead resistance levels. However, Bitcoin appears to be running out of gas. It hasn't even made it up to test the "heavy resistance" level, which shouldn't be that difficult, considering the fact that there is minimal resistance in its current location. As a testament to the apparent weakness of Bitcoin's rally, we can see that has dropped significantly, signaling exhaustion in buying pressure. The has maintained a expansion, but that isn't confirmed by a rise in . Looking at the current structure of BTC , we can see that it's forming what appears to be a of sorts (black flag.) At the moment, BTC isn't the only crypto forming a . Ethereum , Litecoin, Stellar , and many others are also forming some variants, which are not all easily distinguishable. To be certain, we don't know for sure that this is a . However, as I said in my latest Ethereum post, it certainly looks, smells, and tastes like a , and they don't generally taste very good. All kidding aside, we need to see a breakdown from the flag, to know for sure.
On the chart, you can see that there is a target, which rests at $7,618. With that said, I want everyone to know that I'm not saying that BTC will go there for sure. I'm just showing you that, if this is a , and if it does break down, it's possible that BTC could reach $7,618 or lower. I cannot stress enough, that we need to see confirmation, to know for sure. Namely, we need to see a breakdown from the . Contrarily, a breakout above the topside of the , will negate it as a entirely. That being said, I want to point something out on the chart. You can see that above BTC , lies the "heavy resistance" level of the neckline, the 50 (in orange,) the 200 (in purple,) the 50 % retracement level, and the rising black . Below BTC , there are a couple slightly significant support levels, but that's about it. Therefore, the path of least resistance is still down. As a warning, don't be so certain that this small bounce is a sure sign of an end to the selloff. Trust me when I say, the bears a watching, and they're salivating at the growing opportunity for more easy money.
In summary, we now have evidence ( , falling , overhead resistance, weak relative performance, etc.) to support the argument for a continuation in the selloff. A breakdown will be confirmation of that evidence.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media! Good luck trading everyone.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
Dead Cat Bounce - is a temporary recovery from a prolonged decline or a bear market that is followed by a continuation of the downtrend. The name "dead cat bounce" is based on the notion that even a dead cat will bounce, if it falls far enough and fast enough.
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P.S. Just in case reading isn't your strongest suit, the author did mention "With that said, I want everyone to know that I'm not saying that BTC 11.85% will go there for sure."