Bitcoin continued to do nothing during the day on Wednesday, as the $6600 level was the fulcrum for price. It looks as if the downtrend line is holding so far, and it also looks as if the 50 EMA on the daily chart is flattening out yet again. At this point, it’s essentially “dead money.” That being said, there could be a trade someday. At this point I suspect what we are looking at is a scenario where if we break above the down trending line, we could get a little bit of positivity and momentum to the upside, but we will need to take out $7000 to see follow-through. At this point, if we can break above there the market should then go to the $8250 level next.
Looking at this chart, it suggests that the market is going to continue to be very tight, but there are three possible scenarios going forward: the initial scenario that I mentioned previously, and secondly what I think is the most likely at this point, is that we simply drift sideways and negate the descending triangle. That of course is somewhat positive in the sense that at least the very bearish set up didn’t fire off. However, that doesn’t necessarily mean that we take off to the upside either. Would it essentially means under most circumstances is that the market just drift sideways for the foreseeable future, which is something that’s very possible considering there are many catalysts out there.
The third scenario is that we break down below the support line that I have had drawn on this chart for well over six months now, meaning that if we break down below the $5800 level, the market could unwind rather drastically, perhaps going as low as $5000 after that.
