Bitcoin Breakout Target Hit! Bear Trap & Bull Run To Continue?
In yesterday's post, I mentioned that Bitcoin broke out of the inverse head and shoulders pattern after we got a bullish RSI divergence and that it was a good place for a long with a price target of 36.5K. That price target has been met, with price rallying as high as 37.5K. Price is now back within the symmetrical triangle and above the 200MAs. This is one of the three scenarios that I mentioned in my post 2 days ago, in which i laid out the path for price to break back into the symmetrical triangle, retest the bottom of the triangle as support and then rally up. So far we have seen price come back within the triangle, retest the triangle as support, and started another leg up, exactly as laid out in that post.
The next level to watch for the bulls is the triangle resistance at 38K to confirm further bullish momentum. On the downside, the triangle bottom of 36K is the level to watch. I break above 38K or below 36K could signal another big move in that direction. If price continues to go rally, we might have seen one of the biggest false breakdowns / bear traps in Bitcoin history, as the entire area from 35K to 31K, the area between the break below the triangle and then reclaiming back within the triangle, becomes an area that has trapped a large amount of shorts. These shorts could also serve as explosive fuel to the upside should price rally further and start to trigger more short liquidations and cause a short squeeze, where shorts are forced to buy in order to cover their short positions. It is still a bit too early to say that this is definitely the case, but a break above 38K would further confirm this thesis.
As always, I’m not a financial advisor, do your own research, and stay safe!
The next level to watch for the bulls is the triangle resistance at 38K to confirm further bullish momentum. On the downside, the triangle bottom of 36K is the level to watch. I break above 38K or below 36K could signal another big move in that direction. If price continues to go rally, we might have seen one of the biggest false breakdowns / bear traps in Bitcoin history, as the entire area from 35K to 31K, the area between the break below the triangle and then reclaiming back within the triangle, becomes an area that has trapped a large amount of shorts. These shorts could also serve as explosive fuel to the upside should price rally further and start to trigger more short liquidations and cause a short squeeze, where shorts are forced to buy in order to cover their short positions. It is still a bit too early to say that this is definitely the case, but a break above 38K would further confirm this thesis.
As always, I’m not a financial advisor, do your own research, and stay safe!
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