Based on the bitcoin price action and volume information we had yesterday, I presumed that we should see an uptrend till it hit the resistance zone around 35,500 - 36,000. However, at 35k level a strong reversal was evident in the 4 hour chart which is no wonder. But the depth of that short term down trend that you can see currently is not something I expected.

Therefore, I wondered why and wanted to go in to more details.
As I didn't find any significant bearish news, I opened the 15 minutes chart to check trade volumes.

As expected, the attached is what I noticed and do you think these volume bars are natural and caused by average retail investors like you and me?

They are more likely sudden short selling by smart money to test the market for more weak hands as per Wyckoff Method. However, this test dips deeper than expected and in my book. The deeper the better as far as the consolidation is concerned.

Why? In a short term dip more panic sellers are shaken off the market, more stop losses are hunted and remaining investors are more close to diamond hands.
If this argument is true, the next major test dipping to around 36,000 should be with lesser volume.
We shall wait and see but a test could be failed as well (that is why it is called a "test" ). In case of a such unexpected failure, it would mean that the market is not yet ready for the mark up cycle and more consolidation is required.

In conclusion, despite of this unexpected test (dip) I believe we are still in a strong consolidation and getting ready for the mark up cycle. I would just hodl tight.

Not financial Advice, but analysis only.

Not financial Advice, but analysis only.

Buddika Adikari
More insight to the Crypto Market:

#btc #crypto #cryptocurrency #bitcoin

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