Bitcoin (BTC) might finally be out of the woods this time as its price finds support at the 200 EMA on the weekly chart for BNC:BLX above in addition to its previous resistance turned support as well as the $5,800 support. This confluence of supports makes it very difficult for the bears to push the price lower from current levels. RSI is already trading in a falling wedge and is all set to break out of it in the weeks to come.
Elliot Wave Oscillator on the above chart for Bitcoin (BTC) shows the price to have reached the extent of its downward momentum as the price consolidates above key support levels. The price has now settled down at the bottom of the ascending channel and is consolidating before the next move up. Volume has dried up over the past few months which had made it easier for the bears to keep the prices down. However, the number of buyers waiting to jump into the market is not to be underestimated. Most people right now, even the majority of Bitcoin (BTC) bears are looking for a bottom to start buying. As the price approaches the end of this correction and the downward waves become less intense, an increasing number of bears are giving up by taking their profits and waiting for an entry point to go long.
The monthly chart for BNC:BLX above shows that Bitcoin (BTC) has never really been in a bear market if you look at the big picture. It is easy to lose track of perspective when you find most people in this space, trade for shorter time frames like 1H or 4H, especially in bear markets. Why these traders choose to trade and not invest in a volatile, uncertain and risky market like this is anybody’s guess but most of them do that for the wild swings, unless one big swing that goes against all technical analysis wipes them out. Looking at the chart above, it would be very risk even to short this market at $20,000 considering the price still had a lot of room to move up in the channel. However, once the price started to fall, the best you could do is start taking some profits. If Bitcoin (BTC) has bottomed out now, it would mean that Bitcoin (BTC) has finally found a bottom after four years of market correction since 2014.
The daily chart above for BTCUSDShorts shows that Bitcoin Shorts have run into a historical resistance. The number of shorts on Bitfinex is also near its all time high. RSI for the above chart also shows that there is resistance to the number of shorts increasing any further. A drop from these levels will most likely be a quick one. It could be a series of big buy orders to liquidate most of these shorts or it could be some big shorts deciding to take profits. In any case, there will be big moves. The ROC indicator on the above chart shows that the rate of change in the number of shorts has also been on the decline and has now run into resistance for the first time since February.