Bitcoin Update for June 19th, 2021

Happy Saturday everyone! I hope you are all having a great weekend. During my last update, I was questioning whether or not the breakout was real or if it was a bull trap. Well, two days later and we have our answers, at this time I would have to consider the breakout to be a false breakout and also a bull trap.


Bitcoin 4-hour Chart


Looking at the 4-hour chart you can see that bitcoin not only fell below the 50 EMA again it dropped back inside of the descending triangle (pink lines). Bitcoin has actually given back almost all of the gains from the push higher that began on the 13th thus qualifying it as a bull trap. I'm sure that many people bought into the push higher, especially once bitcoin broke out above the upper trendline so convincingly. I did some buying as well, although it was very limited, and as soon as I saw the price struggling to push above the 200 EMA I closed out those positions. It appears that bitcoin hit a low yesterday and is now trying to push higher again. The low set yesterday is slightly higher than the low from the 12th so technically it is a higher low, however, the price could still roll over here and drop lower creating a lower low instead.

Because the price fell back into the triangle bitcoin now must deal with the upper trendline once again. We'll see if the bulls can once again push the price back above the trendline as easily as they did on the 13th, or if this time the price is rejected and falls deeper into the triangle.


Bitcoin Daily Chart


Looking at the daily chart I must say that I like the formation of the daily candle so far. There are still about 8 hours to go before it closes so the candle could still change a lot. If by chance it closes with this hammerish looking shape then I would watch for a reversal just as we saw on the 8th. On the 8th you can see that the price formed a beautiful morning star reversal pattern which led to the week-long push higher. Regardless of what shape this daily candle ultimately forms the bulls still will have to deal with the upper trendline where I imagine many people will be looking to enter a short position. There is also the impending death cross to deal with, unless bitcoin keeps pushing higher I would say the cross could occur within the next week. If the cross does occur that will put even more bearish pressure on the price of bitcoin.


There is really no way for us to know for sure which way the price of bitcoin will head in the short to medium term, all we can do is be patient and watch. Personally, I am still leaning more toward the bearish side, even more so after this failed breakout attempt. My worst-case bearish scenario has the price of bitcoin dropping into the lower $20k region or possibly even lower before it finally bottoms. Bitcoin could then enter an accumulation phase which would most likely last for several months before breaking out and starting the next bull market. My least bearish scenario has the price of bitcoin continuing the sideways choppy action for as little as a few months or as long as into next year building a base from which the next bull market can be launched.


Having said all of that though I am still open to the possibility that bitcoin could push higher and resume the bull market at any time, although I believe the chances of that happening are pretty low. The bullish scenario is the one that I would really prefer but unfortunately, we have no control over where the price of bitcoin goes. As of now, I am still on the sidelines trying to be patient and watching for any opportunity to make money. I said I am on the sidelines but actually, I am not totally on the sidelines, I continue to make small weekly purchases of bitcoin for my long-term portfolio. My short-term bull market portfolio was liquidated in early to mid-May and currently is 100% in USDC.


That's all that I have for now. Take care!

BigskyCrypto

info@bigskycrypto.com




















































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