The hammer as a candlestick pattern always works as a reversal signal, regardless if it comes at resistance or support.
Bitcoin is moving within a broadening channel, doesn't look like a we have a bull flag on the chart.
Each trendline shows three reactions based on candle wick. No sessions are ignored. No candles crossed. Perfect drawing of the pattern and you fail to see a flag.
A hammer showed up on the 1-April session and this led to a drop. This happened after several weeks of bullish action, the situation is similar today.
After the 5-Aug. session, we have 11 candles (11 weeks) and Bitcoin continues to trade below the high that produced the 5-Aug. low, 70K.
These are bearish signals pointing toward lower prices, nothing changes so far based on TA.
➖ Will Bitcoin move down or will Bitcoin grow?
Short-term, the chart is pointing down based on the signals mentioned above. If Bitcoin can move and close weekly above 70,000-71,000, everything changes from a TA perspective because we would be looking at a higher high. Right now, the bearish potential remains intact because have a long-term sequence of lower highs.
There is also a long-term sequence of lower lows.
Let's say Bitcoin drops but recovers before hitting 49K and moves to 72K. This would produce a higher low and the chart conditions change. But if instead, Bitcoin drops and hit 42K, we have a new lower low and unless Bitcoin moves back above the last high, which in this case would be 69,500 (21-Oct.), we would then remain alert for a new lower low.
This is how we look at Bitcoin through a chart, but there is more.
We have many Altcoins, thousands, and many move and produce the same patterns as Bitcoin but not at the exact same time. Some move ahead of Bitcoin, others lag behind. Since they always do the same, we just need to spot those that moved ahead and use these Altcoins to predict where Bitcoin is headed next.
One great example is the Ethereum merge. ETHUSDT is trading at the same level at which it traded back in February 2024. For Bitcoin, this would mean a price below 49,000, around 44,444.
Thanks a lot for your support.
This wouldn't be the end though.
Ethereum moved ahead, if Bitcoin moves down to match Ethereum, Ethereum can move to produce the next step. If ETHUSDT continues to crashes and reaches the same level it traded back in October and September 2023, you know what that would mean for Bitcoin?
You can also consider Cardano and smaller pairs, they produce the exact same patterns but being smaller, these moved ahead. While Bitcoin and some of the giants peaked in March, some of these pairs peaked in January others even in December and November 2023, but the bigger chart structure is the same.
I am very curious and interested in knowing, do you think Bitcoin will move to 100K before moving lower? If yes, when? Do you think it will take weeks or months?
If no, how long do you think it will take before the next major drop?
Leave a comment with your opinion, it is very important, it is needed to gauge the market sentiment and what experienced traders know.
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Thanks a lot for your continued support.
Namaste.