- Bitcoin price shows textbook sell signals on the daily chart.
- BTC price coiling into a wedging-like pattern likely to be problematic for bears in the market.
- Invalidation of the macro thesis remains a break at $13,880.
Bitcoin price shows justifiable reasons to enter a short position. Still, traders should be wary as smart money deception could accompany the newfound bearish evidence. As notorious trader FF once said, “Anything too clean is probably dirty.”
Bitcoin price looks weakened but not dead
Bitcoin price could become problematic for day traders in the days to come. The technicals are beginning to show clear evidence of trend failure. The Relative Strength Index confounds the bearish sentiment as a clear double-top formation with bearish divergence has presented itself on the daily chart. Still, the BTC price has higher liquidity targets, specifically at the $26,000 level that has yet to be breached.
Bitcoin price currently trades at $23,421. The BTC price appears to ascend in a wedging-like pattern over the last two weeks when zooming out of the current congestion zone. Patterns like this are very common smart money traps meant to entice traders to base their positions on the most recent price action. However, larger time frames are beginning to tell a different narrative.
There may be some pullback this week, but traders should be aware that coiling leading diagonal patterns is the most difficult to conquer as they are known to bestow false breakouts and shakeouts in both directions. If you place a short, you should keep your stop loss tight to avoid getting sucked into a losing position.
The diagonal pattern promotes a double scenario in the cards. The BTC price could fall to the origin point of the diagonal at $18,800, or it can be the catalyst of a larger move targeting $32,000.
Until now, the bullish macro thesis will remain at $13,880. A bearish invalidation point will not be issued as per the directional bias and consideration of a potential intelligent money trap that could manifest in the coming days. A second thesis may arise during the week with tighter invalidation points if liquidity is grabbed within the $26,000-$26,700 region.
In the following video, our analysts deep dive into the price action of Bitcoin, analyzing key levels of interest in the market. -FXStreet Team
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Celebrity meme coins controversy continues amid Pump.fun revenue dominance
Pump.fun outperformed the Ethereum blockchain on Tuesday after raking in $1.99 million. Following this achievement, a meme coin based on actress Sydney Sweeney was the subject of controversy after its developers dumped their bags on investors.
PEPE's on-chain metrics indicate potential rally after weeks of silence
PEPE has struggled to see any significant price move after reaching an all-time high in May. Increased adoption rate and low MVRV ratio indicate a bullish run may be on the horizon. A single PEPE outflow from Binance worth $14.7 million gives credence to signs of bullish expectation.
Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF
Ethereum (ETH) is down more than 1.4% on Tuesday following another ETH sale from the Ethereum Foundation. Meanwhile, crypto exchange Gemini's recent report reveals that ETH ETF could see about $5 billion in net inflows within six months of launch.
Crypto community blasts Polkadot following report of treasury spending
Polkadot reports $87 million of treasury spending during H1. Crypto community members expressed harsh feelings toward the DOT team's high spending. DOT is up more than 2% in the past 24 hours but risks correction following the report.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.