Liquidity Gap around 9000!
BTC update
Last week I was talking about the importance of the 8950-9050 resistance zone in the possible continuation of the upward movement. BTC was pushed under this zone quite violently and came to test the 8430 level before rebounding, and is now trading around the 8650 level.
The daily technical situation is finally negative with sell signals given on the indicators while the 4h technical situation shows signs of bullish curves, not excluding a rebound.
Trend follower ?
The latter remains bullish on a daily and 4-hour horizon but has gone bearish on a 1-hour horizon.
What can be done?
We need to be cautious for the moment, after a bullish wave like this one, a corrective wave is normal and the latter could come to test the 8000 or even the 7800. If BTC rallies after testing one of these areas, it will materialize a higher low and further reinforce the possibility of a bullish reversal.
Shall we short to 7800 then?
It's more complicated than that guys I'm afraid, a short position should have been opened just after the rejection below 9050. Indeed, the sharp drop has left behind what we call a liquidity gap. This phenomenon is behind the famous Bart Simpsons formations, so you know that a pump directly to the 9000 level is not to be excluded either.
That's why I remain flat BTC for the moment as far as swing trading is concerned because we are between a support and a resistance zone with a risk of gap filling.
Last week I was talking about the importance of the 8950-9050 resistance zone in the possible continuation of the upward movement. BTC was pushed under this zone quite violently and came to test the 8430 level before rebounding, and is now trading around the 8650 level.
The daily technical situation is finally negative with sell signals given on the indicators while the 4h technical situation shows signs of bullish curves, not excluding a rebound.
Trend follower ?
The latter remains bullish on a daily and 4-hour horizon but has gone bearish on a 1-hour horizon.
What can be done?
We need to be cautious for the moment, after a bullish wave like this one, a corrective wave is normal and the latter could come to test the 8000 or even the 7800. If BTC rallies after testing one of these areas, it will materialize a higher low and further reinforce the possibility of a bullish reversal.
Shall we short to 7800 then?
It's more complicated than that guys I'm afraid, a short position should have been opened just after the rejection below 9050. Indeed, the sharp drop has left behind what we call a liquidity gap. This phenomenon is behind the famous Bart Simpsons formations, so you know that a pump directly to the 9000 level is not to be excluded either.
That's why I remain flat BTC for the moment as far as swing trading is concerned because we are between a support and a resistance zone with a risk of gap filling.
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