Time to deal with bitcoin again. I last mentioned this instrument on the 19th of November, when the price was slightly above 5,200 USD. We had a fresh sell signal after the breakout of the 6,000 USD support. Our analysis was spot on, the price fell like a rock! It has now been almost a month. Has anything changed here?
I think that the current low prices have created a situation where the casuals have already lost interest in this instrument, but fans of the technology and professional traders are starting to look for buying opportunities. In my opinion, we are not there yet and we should experience a further decline. The most recent development since the support at 6,000 surrendered is the descending triangle pattern (orange). In a downtrend, this kind of a formation is a very strong bearish factor. No surprise then that BTC broke the lower line of this pattern and continued downwards.
The new week started with a test of the broken support as the closest resistance, so a very clean price action movement. So far, the test is positive for sellers, which increases the chances of a further slide towards 2,900 USD (blue). That is our mid-term target for this instrument. In my opinion, the chances that we will get there are very high.