Hi friends! I hope you are all doing well! Let's take a look at the four hour chart for Bitcoin! As you can see, after BTC produced an all time high, it has retraced back to the rising black trendline, on four separate occasions. I would like to emphasize the fact that, the more a trendline is tested, the higher the probability is that it will break. A good analogy, is to think of a trendline as a door. The more times, and the harder you hit that door, the possibility that it will open increases. Applying that logic to the BTC chart, we can see that the sellers want to open that door. Interestingly, the frequency of attempts to penetrate the rising black trendline, is increasing. So the sellers are starting to knock more often. Looking at the recent price action, you can see that the bear flag produced a breakout to the upside, which was quickly rejected at the 200 EMA (in purple,) and the 50 EMA (in orange.) Since then, BTC has fallen below the lower support level of the bear flag pennant, and is moving in to retest the black trendline for a fifth time. Should that black trendline break, initial support is likely to be found at the Critical Support level. If prices move below that, we could see accelerated selling to the downside. The first target would be the 61.8% retrace, around $11,200. However, such an event could initiate panic selling in the space, and sink BTC below $9,000. On the upside, if the bulls want to save this market, they need to first get BTC back above the 200 EMA and the 50 EMA (which are forming a death cross,) and start a new uptrend — an unlikely feat. This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, like, comment, 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.***
-JD-
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-