Is Bitcoin (BTC) Going Up Or Down?
cryptolove last edited by Reward
Bitcoin (BTC) price action is marred by indecision. We are looking at the 4H chart for BTC/USD and we can see that the price has yet to break out to either side. We have long been talking about a descending triangle on BTC/USD but I think it is important to note that the symmetrical triangle on the BTC/USD chart is equally significant. While I do not agree that we are going to rally from here, I still think the symmetrical triangle is important because a lot of people are counting on it for the price to break to the upside. In such a case, patterns like these become tools for the market makers to use to their advantage. In this analysis we will further explain how but let us first zoom out and see what is going on.
The descending triangle has yet to be invalidated and now we have the price trading within a symmetrical triangle at the same time. The RSI has broken below a key support but we need to realize that the RSI is just a consequence of the price action. The candles that we see on the chart and the patterns and trend line as well as the support and resistance levels take precedence over all else. This is why it is important not to lay too much emphasis on the RSI or any single factor for that matter. For instance, a lot of people are counting on this symmetrical triangle to break to the upside but if we go back in history and take a look at a similar symmetrical triangle from 2014, we can see that not only did it break to the downside but it ended up resulting in an 80% decline from there.
There are traders and analysts who do not agree with that. They say we are not in a bear market this time (based on the recent parabolic move) and that it will be different this time. I don’t agree with that but I respect their opinion. It’s just that most of these traders have been changing their opinions in the past taking complete 180 degrees turns, going from bearish straight to bullish. So, you need to be careful who you listen to because it is important to know their track record. There is nothing wrong with having a bullish or bearish bias but that bias should not blind you to possibilities. If we take a look at the Longs vs. Shorts ratio it is still almost 65-35 for Bitcoin and 80-20 for Ethereum (ETH) in favor of longs.
The Fear and Greed Index has not changed by much. On the EUR/USD front, we are in a similar situation and we might see a short term break to the upside. This situation is even clearer on the ETH/USD chart. We can see that the price is close to breaking out of a descending triangle and a symmetrical triangle. However, I expect the price to break above the descending triangle first misleading traders into thinking it is invalidated and then falling back below it to break market structure and doing the inevitable. This happened the last time Ethereum (ETH) broke market structure and I see no reason why it cannot happen again.