Bitcoin : Market cycle analysis, 3 phase of break out strategy
Here it is when you see the price is moving in the consolidation pattern after the previous bull run, the bias is likely to become bearish. If you remember about my previous post about the market cycle, there are 4 phase of the overall market cycle that usually becoming my benchmark to identify the trend. There are accumulation, mark up, distribution and the decline zone. For the current structure, I find it more likely to be the distribution zone where there is a "denial" action from the big player where we can see the price drops from the $41800 to $30000 zone. However, the current bounce might be a relief rally as there is a potential accumulation from the retail traders that think the price has in its dip. However, if this market cycle analysis in valid, the worst is yet to come as the next action must be a "fear" action which will causes a decent drop from the price because the retails that has bought since the dip do the panic sell mode which will later become a potential capitulation (if the bears win the war again at the key level zone.
Another strong validation could be this action where we can see there is a local support trend line which has held the price since the dip and has been broken. In this current structure, we can see that there is actually a rejection toward this support trend line that is now turning as a resistance. This could be the validation of the phase 2 of break out strategy which will leads the price to strong downside moves as the major bias in short term.
Key level will be located at the blue zone which is the psychological number and has an alignment with the .50 Fibonacci retracement level which means that breaks below this zone will leads the price to further downside moves and we can see the real capitulation from here. First short target is $30000 zone which has a big probability to be touched in near future.
Another strong validation could be this action where we can see there is a local support trend line which has held the price since the dip and has been broken. In this current structure, we can see that there is actually a rejection toward this support trend line that is now turning as a resistance. This could be the validation of the phase 2 of break out strategy which will leads the price to strong downside moves as the major bias in short term.
Key level will be located at the blue zone which is the psychological number and has an alignment with the .50 Fibonacci retracement level which means that breaks below this zone will leads the price to further downside moves and we can see the real capitulation from here. First short target is $30000 zone which has a big probability to be touched in near future.
The validation to enter the short position based on the previous post is when we see the price breaks below this red support trend line to catch the $30000 support zone. We must wait further for this confirmation.