We expect further downside on this pair, signalled by the key level breakout and retest. We can also see a change in market structure from bullish to bearish which supports our directional basis.
List of Reasons for potential pull back/mean reversion:
1: The market is over extended and has been moving bearish for almost 3 weeks straight with no pull back. This is more visible on the weekly chart than on the daily chart.
2: The trendline on the daily chart was broken with no retest.
3: Month Support level was broken with no retest around the 1.25***...
RSI is on the long term support since its been in an uptrend and price is right on the 50.
Stop loss could be based on RSI breakdown and retest that puts the uptrend in doubt.
Green lines represent the 10-month channel for price action, which it is currently at the bottom of.
Note the volume by price on the right with the 2 light blue dotted lines. The top line reflects the price of most volume during this channel and the bottom is a high volume node. Both of these price points should have strong price memory with investors feeling...
It's very uncommon for BTC to not revert to the mean and at least reset the RSI to the 50 level before continuing its trend upwards, this is a 3 day chart so be aware what I am showing could take a while to play out but its very probable.
At the end of a major long term resistance / falling wedge / bull flag
Possible return to the mean of the downtrend channel
Could easily POP, set you sell order to catch it! =)
