Bitcoin (BTC) has declined significantly in the past few days and the price is temporarily oversold on shorter time frames now. However, the big picture remains intact and BTC/USD will see a major decline in the weeks ahead. That being said, the manner in which the price has declined in the past 48 hours shows that it is preparing for a final move to the upside. The price is currently consolidating above a strong support as shown by the VPVR profile. This could pave the way for a rise towards $6,000 before Bitcoin(BTC) declines further. As long as the price continues to trade between $3,000 and $6,000, a lot of new traders are going to get hurt. This is because most of them expect the price to go up or down when it is never that easy or straight forward.
Trading Bitcoin (BTC) is a whole different game compared to what it used to be when a small number of tech geeks used to buy and sell it on Mt. Gox. Now, we have algorithms and bots that trade like institutions trade the stock market or the forex market. The fact that there is still a dire lack of regulation in this space gives the market makers more opportunities to give retail traders a run for their money. Traders are so fond of their little trend lines, moving averages and indicators that they forget about the one thing that matters the most and that is investing psychology. Like Sun Tzu says, “If you know yourself and you know your enemy, you need not to fear the results of a thousand battles”. The mistake most traders make is that they do not fully know their ‘enemy’.
The daily chart for BTC/USD shows that the price has faced a strong rejection at the trend line resistance that extends back to the end of 2017. Interestingly though, the Stochastic RSI is now close to being oversold on the daily time frame. This means that Bitcoin (BTC) is more than ready for a strong move to the upside that could push the price towards $6,000 or higher. That being said, the daily RSI remains heavily overbought. Conditions are even more overbought on the weekly time frame which is why a fall back to the trend line support is inevitable. If the bears assume control around those levels, we could see a decline below $3,000.
We have mentioned in some of our previous analyses that BTC/USD market cycles have been expanding throughout history which is why the current bear trend is far from over yet. However, the majority of analysts and traders expect that a retest of the trend line support with a wick down to $3,000 would be the formal end of this bear trend. It would be important to keep an eye on S&P 500 around that time because if the stock market continues to decline till September, there is a high probability that Bitcoin (BTC) will decline as well.
Posted from Coin Inquire coininquire.com : https://coininquire.com/bitcoin-btc-appears-determined-to-test-6000/
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