Bitcoin (BTC) has already done what was required to restore confidence in the market by breaking the downtrend. It broke the downtrend resistance line (shown in white) in mid April and broke out toward $10,000 before falling back to find support at a long term support line (shown in yellow). This support had already been tested before three times and it held strong. This time, Bitcoin (BTC) successfully tested it for a fourth time and it held as before.
Normally, signs like these should have formed the basis for a strong bullish impulse by now but we have seen nothing like that with Bitcoin (BTC) so far. There is a lot of fear in the market and the interesting part is, the bulls and bears are equally scared, hence the indecision. Retail traders are scared to make a trade at this point. Bitcoin (BTC) bulls are looking to go long past the $11,700 mark and Bitcoin (BTC) bears are looking to go short if and when the long term support line (shown in yellow) is broken. This period of indecisive price movement might be inconvenient for the usual Bitcoin (BTC) hodler but it is a golden opportunity for those who are looking to accumulate before the next rally.
Bitcoin (BTC) is currently trading in a rising wedge on the 4H chart with RSI near to overbought levels. This means that the price will most likely retrace in the near future as Bitcoin (BTC) breaks below the falling wedge. This close range price action is ideal for investors who are looking to dollar cost average their orders in for long term accumulation. It is also a positive sign for long term bullish movement as the price is rising steadily with minor retracements along the way. The RSI on the daily and weekly chart is still near oversold levels and long term prospects seem brighter for Bitcoin (BTC) bulls.
In times like these, what differentiates an amateur from a professional is the ability to think logically instead of emotionally. Most investors follow the crowd and end up making poor decisions. This is nothing new and it is quite surprising to see how this has been happening over and over again throughout history. However, the shrewd investor buys when the price is low and sells when the price is high, without giving in to market sentiment or personal emotions.
Bitcoin (BTC) has been trading sideways for a while now which has encouraged some adventurous bears. Bitcoin Shorts (BTCUSDShorts) on Bitfinex has been on a rise for the past few days. Currently, the price is trading in a rising wedge on the 4H chart which means it is going to undergo a retracement in the near future, leading to a rise in Bitcoin (BTC) price. It may be a sad day for the bears when that happens as the prospects of a bearish outlook are fading with every passing day. However, until the $11,700 resistance is breached, there is no true victory for the bulls either.