Bitcoin (BTC) is at an interesting point where it has to break above or below the triangle it is trading in on the 4H chart. Having faced a rejection at $7,700 again, the more likely scenario is that it will break below the triangle and once again retest the support line. The volume is fading with every passing day. Neither the bulls nor the bears seem to be in control but this lack of interest coupled with fear in the market is more advantageous to the bears as of now. However, a bearish entry at this point may not be worth the risk reward.
Bitcoin (BTC) is currently trading in the same manner as it did in 2013. The price bounced off a long term support line and then traded sideways for quite some time. However, at one point in 2013, the price retested the support line and broke below it. In the case of equities, this would be a big bearish sign and would result in some panic selling to drag the price further down. A break of structure is considered to be a strong bearish signal but it is important to wait for a direction before making a bearish or a bullish entry when that happens. In 2013, Bitcoin (BTC) did just that by breaking below the support line. Surprisingly, there was no significant panic selling and the price rose back quickly.
However, this time around we have the option to short Bitcoin (BTC) on exchanges like Bitfinex and Bitmex. As seen before, if this kind of false structural break occurs again followed by a quick recovery, it will trap a lot of bears who will get burned on their BTCUSDShorts. Something similar recently happened when BTCUSDShorts just nosedived in a single day as the price shot up. Maybe the market makers believe that they can pull off a similar stunt this time by breaking market structure to trap the bears in.
As for long term bulls, there is not much to lose with an entry at this point as Bitcoin (BTC) price is already close to its mining cost in most countries. It costs around $4,758 to mine a Bitcoin (BTC) in the United States, $8,402 in United Kingdom, $14,275 in Germany and $26,170 in South Korea. The average for these 4 countries which contribute to most of the trading volume is $13,401. This means that the price of Bitcoin (BTC) is curently significantly lower than what it costs to mine it in most countries. That is without taking storage, safety, equipment purchase and other expenses into account. All things considered, Bitcoin (BTC) may be poised for a temporary correction and the price may continue to trade below $10,000 for the next few weeks. However, the long term trend is still intact and the price is closely following a 2013 style scenario which means Bitcoin (BTC) will most likely end the year at a price of $30,000 or higher.