It's a Trap! (aka Episode 6: Return of the Bitcoin?)
Well, plenty of people are talking about the big Bitcoin bounce. I really want to believe it too; for a while I hoped. But it's hard to un-see some ominous signs for the near future at least.
The volume's been slowly declining through this bounce, which, though not critical, isn't great for sustaining it once the price has started dropping. Stoch RSI on the 4-hour chart is really overbought and has been for a long while, especially considering this is (for now) still a bear market. There's a downwards channel formed on the hourly charts and resistances that became supports are starting to become resistances again. I can easily see this playing out:
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The 1-hour Ichimoku cloud base is a promising potential bounce point, and the downwards channel resistance (upper purple line) is a likely rejection point for an uptrend. The 1H Stoch RSI is bottoming out but it could have several more red candles while on the floor - and in a bear market, it's more likely than not.
Overall, it's almost perfectly placed to make a Head and Shoulders setup, with a classic short target almost exactly at the previous low point.
So short term, I'm definitely bearish. But if we double-bottom with this pattern, that's a pretty great W-reversal bitcoin would have managed. And then, perhaps, "A New Hope"?
(I'm just sharing some thoughts on charts - not advising anybody to follow them! Comments and critique very welcome!)
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