The downtrend continues which for most means dread. As traders, however, we are looking for solid entry points and signs of reversal to enter long or close our shorts. Three instances of daily bullish divergence have led to very solid bounces (50%, 40% and 20%) since this downtrend started and now we are in the middle of the most divergent of divergences yet this year on the daily time frame. Not only that but Bitfinex shorts are at all time highs and it's just a matter of time before a short squeeze pushes them off their peaks.
While the bears can easily expect another move down to 2.8 to 3k, the bulls have a solid case for about a 25% reversal bounce (from 3.5k to 4.5k) before that happens or for a much larger reversal bounce if we reach that 3k zone. In summary, bears are very unlikely to breach the 3k zone with any conviction within the coming two to three days and bulls are eagerly awaiting either a bounce from here to to test previous daily highs at the 4.5k level or for another move down to 3k to enter bottom fishing plays.
There are currently no good entry points for either bulls or bears as stop losses would have to be set at rather extreme levels, leading to unfavourable risk to reward ratios.