Bitcoin (BTC) has crashed hard below the symmetrical triangle after days of indecision. In the past 24 hours, investors were hoping it would break to the upside. Ethereum (ETH) made some big moves to the upside and a lot of traders expected Bitcoin (BTC) to do the same. However, to their disappointment the price has done the inevitable and crashed below the symmetrical triangle. This crash is significant but not as significant as what it denotes. This has finally shown us how the large symmetrical triangle that a lot of bulls are hoping to break to the upside to lead the price towards a new yearly high could also meet the same fate. In fact, it is highly probable that it will. The market has run out of bears to shake out so the market makers are beginning to turn to the bulls.
However, before they can crash BTC/USD below key support levels, they will have to ensure that more bulls are trapped in. So, they will give them opportunities to buy the dip rather than crashing the price in one go because that would mean killing the goose laying the golden eggs. Nobody wants to do that. Bitcoin (BTC) has finally declined below the 38.2% fib retracement level. It stopped declining around the 61.8% level but that does not mean that it is a strong support. This was one big move to the downside which is likely to be a result of aggressive longs being liquidated. Investors have been very bullish the last few days. Most traders have been talking about a breakout towards $15k from here so it is no surprise that most of them entered leveraged longs with stops just below the symmetrical triangle.
This move to the downside was very significant but before we get ahead of ourselves let us not forget that a larger symmetrical triangle has yet to be broken. The price stopped declining close to the trend line support. Although it is still very likely to decline much lower from here as indicated by the RSI, we would still need to see a break below this trend line support for confirmation. A move to the 61.8% fib retracement level from here is also likely. This would mean that the downtrend has finally resumed but the bullish resolve would still not be weakened.
If the price were to decline while the bullish resolve remained stronger, the market makers would be over the moon. This is their primary goal but it is not always easy to achieve because the longer the price keeps stalling a move to the downside the higher the probability of shorts stacking up which eventually the casinos have to pay to. If we see a strong bounce in BTC/USD from here, then we will have confirmation that the price can rally towards $10,900 before it declines. If we don’t see a bounce up and the price keeps trading sideways then we can expect it to resume its decline in the near future.