- September 4, 2020
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
The title may sound a bit dramatic but it is true. Bitcoin is on critical crossroads as it maintains trading within the long-term Channel Up formations but any break lower endangers the effort made after the COVID flash crash.
** Two Channels **
As you see on the chart, there are two main patterns involved: The Primary (blue) Channel and the Secondary (orange) Channel.
– The former is the sequence from the December 2019 low that excludes the COVID collapse led by massive Wall Street liquidation where we had asset-wide flash crashes and sell-offs. That was non-technical.
– The latter is the sequence that starts after the pre-COVID sell-off levels got recovered in late April.
There are also two minor patterns to consider the Head and Shoulders (shown by Triangles) of late January/ February 2020 and August 2020.
** Only COVID-like news can extend the current sell-off **
The common factor of those Head and Shoulders (H&S) patterns mentioned above, is that both (when completed) led to strong sell-offs which however where contained within the technical boundaries of the Channel Up formations.
As you see the current level Bitcoin is at, is the (d) leg that found (so far) Support on the Higher Low trend-line of the Channel, similar to the March 09 (d) leg. The LMACD is also roughly on the symmetrical Support Zone.
In my opinion this suggests that currently a leg (e) is possible only under liquidation conditions/ circumstances similar to the COVID sell-off. And if such break-down happens, it invalidates the post-March bullish sentiment.
Whether that is true or not we will see in the following days. But what do you think? Are we going to have a COVID-like sell-off event or BTCUSD will rebound as the Channel Up formation technically indicates? Feel free to share your work and let me know in the comments section!
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