Channels, Triangles, Distribution, Accumulation

25 Mei 2021

Are we in the process of staging a reversal here?
Have we merely escaped from one down-trend channel to get caught in another, less steep one?
Did we get stuck in the Bermuda Triangle?
If so will we find our way out of it or go diving for oysters at the bottom of the sea first?

Bullish Case:
Bullish engulfing daily close yesterday
MACD indicates lessening sell momentum and we could get a cross soon
The last daily closed above previous weekly close resistance at $38,150

Bearish Case:
We're back to making lower highs on hourly and 4-hour charts
Price action today back to looking more like distribution than building a strong foundation for trend reversal
Price could not move above the triangle-like structure being formed

Upper Targets:
$38,150 - Another daily close above previous weekly close resistance
$40,500 - Daily close resistance level
200 ema currently at $41,800 - we have yet to successfully close above this important zone
$45,100 - Multiple htf resistant zone. Almost certain death for bulls longing into this, on the first try at least

Lower Targets:
$32,250 - Bottom of triangle
$27,100 - The full 61.8% btc retracement zone
$25,150 - The 65% retracement zone, often a max retracement on bullish instruments
$23,800 - Close of super strong buy volume daily candle from back in January (very likely to be absolute bottom, if we get there at all)
$18,860 - Highest weekly close of the previous bull run
$13,715 - Highest monthly close of the previous bull run

Conclusion:
It is easy to find an entry and make 2%. Bullish hammers galore on ltfs with some continuation, but then the price action turns choppy. If you are looking to go long for more than just a tiny scalp play, your stop losses may easily get hit in this environment as we consolidate, move higher, then sweep the lows. Then move higher again but with lower highs.

I am a buyer at a re-test of the bottom of the purple triangle and previous weekly support line at $32,250. If we move even a little bit lower than that line I will consider it a bearish continuation to the bottom of the blue channel or one of the lower targets. At the very least I'm hoping for a bounce play from the buy zone back up to the top purple line.

The possible likely scenario right now is that we bounce around in range of this purple triangle for a few days before we figure out which way we want to go next.