Printing a closing monthly candle with a $12,000 wick above is not a good look for Bitcoin bulls. With such a candle there are probably going to be some repercussions for the $BTC price, and they could well augur another bearish month.
Breakouts and fake-outs
Every time it seems that Bitcoin will finally start reversing its sideways and downwards trend, the price is stopped in its tracks. Tuesday’s nice upward price action had broken through the descending trendline, and the breakout looked as though it might reach escape velocity.
However, volume did not rise sufficiently with the breakout, and the bears were able to sell the price back down with some alacrity, sending $BTC back under the ascending trendline where it continues to lurk on Wednesday.
Therefore, with one fake-out to the upside, and one to the downside, it’s a 1-1 draw up till now. That said, the $BTC price has reached the very apex of the triangle that it is tracking within. What could be a decisive move is about to materialise.
More sideways and downwards to come?
Source: TradingView
The short-term chart for $BTC shows a gradual series of higher lows against a much sharper series of lower highs. After the two fake-outs the price has been forced into a tiny space at the end of the triangle. The next move is either up, down, or sideways. If the move is downward, the ascending trendline that reaches all the way back to 2021 is a good support area.
From a technical point of view, given the somewhat nasty looking monthly candle for December, downwards and sideways is probably the more likely option. With not too much happening until later in January when Donald Trump is sworn into office, the market could face some uncertain price action until then.
Major trend reversal?
Source: TradingView
The monthly chart view for $BTC shows the candle in question. If the candle is a shooting star, it would likely herald the beginning of a new downward trend. However, it is debatable whether this is the case, given that a shooting star would generally have a smaller bottom wick. Even so, the size of the top wick is definitely a matter of concern.
If the bears do have their way, the $BTC price may be forced below the ascending trendline, with the 0.382 Fibonacci at $85,000 a possible bounce level. Nevertheless, a retest of the new bull market base at the low $70,000s could be the ultimate destination. If the price did get down to this level, buying would be likely to be extremely strong.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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