Bitcoin (BTC) rallies towards the top of the symmetrical triangle in an interesting turn of events as the bulls have suddenly regained control. The price is now expected to continue to rise towards the top of the symmetrical triangle and it is likely to break above it. The probability of a rally towards $4,500 is higher than before and the price is expected to ultimately close below the 200 day moving average. The Stochastic RSI point to a favorable near term outlook for BTC/USD as the price is fairly oversold short term. Bitcoin (BTC) has tested the 38.2% Fib extension level as strong support and is now expected to continue to rally from current levels. The bulls seem more confident and some altcoins have already registered double digit gains in this brief time.
The price of Bitcoin (BTC) was long overdue for a strong correction to the upside. We have finally seen a big move to the upside but the rally is not expected to stop there as there is still plenty of room for further upside. That being said, Bitcoin (BTC) might continue to rise for the next few days but it is still expected to close the week around $4,000. This is because the long term outlook for BTC/USD points to more downside in the weeks ahead. This short term relief is nothing more than calm before the storm. As always, a lot of retail bulls are going to take this as a sign of bullish reversal and they are going to bet big on Bitcoin (BTC) and altcoin only to be caught off guard in the weeks ahead. The next few days are going to be hard on the bears as most of them are already sitting on major losses on their margined short positions.
The number of margined shorts keeps on declining. The daily chart for BTCUSDShorts shows that the margined shorts could decline all the way to the previous support before any trend reversal can be expected. It is important to note that BTCUSDShorts is already oversold on both the daily as well as the weekly time frames but that does not mean that things cannot get any worse. In fact, if the price of Bitcoin (BTC) breaks the trend line resistance and rises further in the days ahead, we could see the bears panic and the number of shorts will decline aggressively as a result.
A lot of bears entered margined shorts around the middle of the month when they expected the price to decline. However, BTC/USD kept on moving sideways and then finally made a few moves to the upside. The bears were too stubborn to close their wrongly timed shorts and currently most of them are sitting on extremely vulnerable positions that could be liquidated with a few big moves to the upside in BTC/USD. As BTCUSDShorts continues to fall, the sell pressure on Bitcoin (BTC) keeps decreasing and the bulls feel more confident going long on Bitcoin (BTC).