BTC bulls’ repeated attacks on 25,000 were all suppressed by the bears. Are we panicking? We all have a question about the bull and bear market. Today, I will make a brief analysis of this market trend.
On the daily chart of BTC, a huge head and shoulders bottom pattern appeared. Of course, the only ones that can match are the left shoulder and the head. The right shoulder is what we need to discuss this time, so don’t bring this pattern into your mind, because it has not and may not happen. So next we have to prove the possibility of the appearance of this right shoulder: (As usual, we will analyze it from the technical and macro aspects respectively)
1. From a technical perspective, a large head and shoulders bottom or head and shoulders top is often a stable form of transition between bull and bear cycles. It can ensure that the market has enough time for repeated testing, while also providing sufficient distribution or accumulation of funds by the main or institutional funds. This is the premise for our speculation on the appearance of the right shoulder.
2. Still on the technical side, let’s take a look at the “gold pit” created by SBF. That’s right,
It is a typical Wyckoff accumulation range. Friends who want to review it can directly search and fill in the corresponding key nodes on the chart. What I want to say is that the duration of this accumulation range, the distribution of trading volume, and the price fluctuation range in the corresponding period are not as good as the golden pit from the end of 2018 to the beginning of 2019. Therefore, such a simple technical pattern may not be enough for the market to form a solid bottom chip. Therefore, returning to the first point, introducing a large head and shoulders pattern may be the result that the main funds prefer to see;
3. Still on the technical side, let’s take a look at the recent price resistance and the 24,000-25,000 level where the price started to oscillate back.
In less than a week, the price in this range tried to break through the historical pressure level of 25,200 many times, but all failed. Then the main force maintained the price above 23,800 and continued to fluctuate. During this period, I also observed an interesting phenomenon, that is, the price always rose more during the day and fell more at night. When it rose, the trading volume on Binance was always higher, while when it fell, the trading volume on CoinBase was higher. Based on the trading habits of most Chinese and European and American people, you can guess the long and short sides here. It is worth mentioning that the total transaction volume of the entire network in this round of increase, that is, the result of the sum of various exchanges, did not reach a range that can be called a sky-high volume. Looking back at the trading volume on April 1, 2019, we can simply draw a conclusion that the overall heat of the market did not cross the threshold that was enough to start a bull or long-term bull trend, but this instead provided a basis for a wide range of fluctuations in a longer period.
4. On the macro level, let’s first look at DXY, which is the US dollar index
On this daily chart, a standard falling wedge + breakthrough pattern has appeared. The strength of the US dollar corresponds to the weakness of risky assets. If the weakening correction of the US dollar played a big role in this round of 16,000 to 25,000 rebound, then if the US dollar recovers strongly, the current price of BTC and even many financial assets including US stocks may face downward pressure, which provides the basis for our guess of the right shoulder pattern on the macro level; 5. Still on the macro level, in the early morning of the same day when I issued this view, the Federal Reserve will release new meeting minutes. I don’t want to speculate too much about the direction of this meeting. The entire market is currently betting on the 25bp rate hike plan with only three remaining times, and starting to plan for the layout of the next round of bull market in advance, hoping to get on the train in advance, or directly start a new cycle; but what I want to say is that if you pay attention to the latest CPI and PPI data released by the United States, you will find a less optimistic situation, that is, the decline in inflation has slowed down significantly, which means that the current interest rate target may not be able to complete the Fed’s ultimate mission; history tells us that these Americans always like to do something weird, let us wait and see in the next 9 months! Conclusion: Whether from a technical or macro perspective, we are now experiencing only a weekly rebound. As for the rebound position, 25300 is definitely not the high point of 16000. The key position of the retracement is still 22800, which is the dividing line between the strength and weakness of this round of rise. The real bull market may need a right shoulder position that may occur or be inserted at the daily level. The rest is left to time.
