An unsuccessful test of $7,550-7,800 in the Bitcoin market caused a sharp counterattack of sellers.
Sellers broke the bottom trend line of the black triangle.
High probability of the fall continuation to $7,060.
Yesterday’s Bitcoin price movement ended with a failed attempt of buyers to seize $7,550-7,800. After that, sellers immediately organized a counterattack. Now, the price has stopped just below the bottom trend line of the triangle, which has formed since 25 November. It is not clear yet whether it is a false breakdown of the trend line, or a real one. Taking a closer look at the situation which occurred when buyers tried to storm the yellow range, at the 5-minute timeframe, we see that for quite a while, Bitcoin price was in the yellow zone:
It looks like a trap in which sellers rope in weak buyers to dramatically change the vector of movement for exit from the limits of consolidation.
Thus, another daily candle formed on the daily timeframe with a false breakdown of the price zone $7,550-7,800. It increases the chances of sellers to continue falling. The local growth trend in Bitcoin market as from 25 November is coming to an end. We are waiting for the price mark $7,060, for it will depend on whether the price fall will continue to $5,550:
What are we waiting for today and tomorrow:
- Confident breakthrough of the lower trend line of the black channel.
- Probably easy correction to the broken black line.
If it does not happen, today’s trend line breakdown is false. And we are waiting for another buyers’ attempt to test $7,550-7,800.
The anomalous situation with the marginal positions of buyers continues, so we will not dwell specifically on it:
Sellers have been actively reducing their marginal positions for the second day. Although the situation is clearly on their side:
With the prospect of the fall continuation it would be logical on the contrary to increase their positions. It indicates on sellers’ uncertainty about tomorrow fall.
At the moment, buyers have not been able to form a decent wave of growth. We have marked it as wave (c) and cross the level of Fibonacci 0.382. Mostly, the wave (c) should be no weaker than the wave (a) in the correction waves. However, this situation indicates a clear weakness of buyers and a sharp fall in the future:
Therefore, we have to wait for buyers’ response to the broken trend line to be more confident about the test of $7,060. Let’s see tomorrow whether the situation with our main scenario of Bitcoin price movement has become clear.
Image Courtesy: TradingView