Greetings.

We just had a successful monthly closing.

A successful pin-bar candlestick pattern has formed and not gonna lie, we could expect a bullish month ahead due to this because pin-bar usually indicates a trend reversal. Many other things indicate whether we could get a reversal or not. We would be looking into that later on in this post.

Yesterday I was reading an analysis of Bitcoin by @tobetada and he mentioned something very hard to see normally. As I read through I came to know that even he found it recently.

He referred to this trendline in his post which looks magical, whenever the trendline got tested price went up, and not even the wicks tend to go below the trendline. Here, the retest that price does after bouncing from trendline is always happening, but this could be a problem right now.

Problem.

If you zoom into the current price segment you will find this:

If the price comes for retest that is good but it won't be a normal retest for a bullish movement rather it could be a retest for the Double Top Pattern which has formed. The pattern had a successful breakdown and is working very efficiently till now, yes it can form support on the trendline but if it works then it can't work that nicely right now because of the rectangle area I have set known as neckline. At the neckline, it could do a retest, and then there is a possibility for a breakdown of the trendline so formed. We need to look out for this.

Source

For instance, if we take that the bear market is about to over and we are about to get into a consolidation AND our double top pattern works well as well then this could be the possible market conditions.

This is if consolidation were to happen for months or a year. Although if this happens then this is neither bullish nor bearish because as it is a consolidation, it will be divided into either accumulation or distribution zone which we would be knowing if the breakout happens or breakdown respectively.

Markets can't follow a pattern forever!

The trendline pattern has been tested a lot and the more this gets followed, I feel the more it becomes close to breaking it down. I am not much bullish on the trendline right now because of this reason but one other thing is this:

Source

This has been followed 2 times successfully and something like this, we usually see happening more than 2 like 3 to 4 times such pattern gets followed. From looks this might feel like a kind of weak pattern and yes it does (personal opinion) but still considering this, buying for some percentage of the portfolio can be a good thought.

Trendline but bearish.

This is good if the support trendline gets tested but what is above due to the above trendline, the price goes bearish. The pattern so formed which you can see is a Rising wedge which is a very popular bearish pattern in the market although I don't think it would be completely followed because then it would be taking bitcoin to the $200 level which right now is an impossible task still due to this we could expect a bearish momentum once breakdown happens and if a breakdown happens then it would be forced by the double top pattern and for the successful double top pattern we need a good retest and retest should be supported by the trendline of support. Therefore, the focus should be on the double bottom region, the rest will come if that gets followed.

But.

If the triangle and support line forms support again then, be ready for +$100000/BTC. This isn't a joke as it is practical. Sooner or later we would be seeing bitcoin as Bitcoin is bullish forever in the long run!

Short term.

Price still holds the support of $18k and has formed a miniature rising wedge pattern, we can expect a lower test of $18k again, and probably if it does then it is possible that there could be the double bottom pattern. We won't be going much deep into that because firstly let it form a double bottom.

I hope you have understood both the bearish and bullish scenarios and their reasons successfully. Although my area of interest is $16k which we would be discussing some other time. Is buying the dip, good thought for current market situations? What do you think?

Thank you and have an incredible rest of your day. Again thanks to @tobetada for such an informative post, trendline was fantastic! SANJAM

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