Bitcoin Price Prediction: “Anything too clean is probably dirty”
- Bitcoin price shows textbook sell signals on the daily chart.
- BTC price coiling into a wedging-like pattern likely to be problematic for bears in the market.
- Invalidation of the macro thesis remains a break at $13,880.
Bitcoin price shows justifiable reasons to enter a short position. Still, traders should be wary as smart money deception could accompany the newfound bearish evidence. As notorious trader FF once said, “Anything too clean is probably dirty.”
Bitcoin price looks weakened but not dead
Bitcoin price could become problematic for day traders in the days to come. The technicals are beginning to show clear evidence of trend failure. The Relative Strength Index confounds the bearish sentiment as a clear double-top formation with bearish divergence has presented itself on the daily chart. Still, the BTC price has higher liquidity targets, specifically at the $26,000 level that has yet to be breached.
Bitcoin price currently trades at $23,421. The BTC price appears to ascend in a wedging-like pattern over the last two weeks when zooming out of the current congestion zone. Patterns like this are very common smart money traps meant to entice traders to base their positions on the most recent price action. However, larger time frames are beginning to tell a different narrative.
There may be some pullback this week, but traders should be aware that coiling leading diagonal patterns is the most difficult to conquer as they are known to bestow false breakouts and shakeouts in both directions. If you place a short, you should keep your stop loss tight to avoid getting sucked into a losing position.
The diagonal pattern promotes a double scenario in the cards. The BTC price could fall to the origin point of the diagonal at $18,800, or it can be the catalyst of a larger move targeting $32,000.
Until now, the bullish macro thesis will remain at $13,880. A bearish invalidation point will not be issued as per the directional bias and consideration of a potential intelligent money trap that could manifest in the coming days. A second thesis may arise during the week with tighter invalidation points if liquidity is grabbed within the $26,000-$26,700 region.
In the following video, our analysts deep dive into the price action of Bitcoin, analyzing key levels of interest in the market. -FXStreet Team
Author
Tony M.
FXStreet Contributor
Tony Montpeirous began investing in cryptocurrencies in 2017. His trading style incorporates Elliot Wave, Auction Market Theory, Fibonacci and price action as the cornerstone of his technical analysis.
