Following my last technical analysis update, Bitcoin has resumed its decline as expected. I mentioned before that we could see a slight retracement in price from the consolidation zone in the $8,200 area.
True enough, the bulls did manage to push price up all the way to $8,600 however was met with strong selling pressure. I made comment on my Twitter the writing was on the wall and the rally was likely to be a bull-trap. Refer to circled areas below:
Take note the number of candles it took to rally, compared to the long red candles on the way down. This is naked chart analysis, you do not need moving averages to sell you this!
It should also be noted there was an inverted head & shoulders pattern.
However, this would have been a counter-trend trade and a lower probability for success. This pattern on its own is not a good enough reason for me to initiate a trade.
Interestingly, the pattern failed to reach targets. This again, provided a clue that the buyers were losing control.
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The bearish continuation was further confirmed on the break of the rising channel .
If there are no large green candle anytime soon, Bitcoin is more likely to continue its decline.
Next projected target is $7,100, followed by $5,350.
Disclaimer: This is only my opinion, make of it what you wish. It is not financial advice.
