A very interesting few days has most of us wondering what exactly is going on:
BTC had exploded up two nights ago and had everyone convinced this was the start of the bull run. However, I'm not convinced. Theres a few things we have to look at first:
Firstly, tether fud was the immediate catalyst and most of the retail traders panicked and dumped into BTC causing an usually high demand for BTC at that moment. There was no other reason, at least what I can see on the chart, for this massive run up. In fact, the chart was looking bearish and still does in my opinion. Secondly, even after all that price movements, BTC has found a way to get back into the descending triangle. On other exchanges it never even exited the triangle. This is bearish still and I will keep reiterating it. Most of my drawings are using Bitfinex charts so for now we'll stick with that. The whole Bitfinex/Tether story is a long conversation for another day. This could've just been an orchestrated short squeeze to get all those over leveraged shorts out, as I stated there were way too many, and people trying drop some news to explain the reason for the pump. We've seen this before. People need news to answer their questions or doubts.
Also, I was always taught when trading that a price doesn't stop randomly, it always has a purpose of where the wick or candle body closed for the most part. Well, look where that long wick touched. Completely rejected at my extremely long term resistance level (blue dotted diagonal line) and came crashing down back inside the triangle. Not only are we back inside the triangle, but we painted a very large reversal candle on the 4HR, Daily, and Weekly time frame. You name it. Thats all I need to see from a long term bull or bear perspective.
In conclusion, I still stand in my bearish state until bullish patterns develop to lead me to believe the pain is over. For now, we aren't getting that. We just have more reasons to believe we're bearish after the recent price action. Keep in mind, we do have a lot of over-leveraged still, and this can spike up again if it wanted to. The main thing to look for is what happens afterwards. Just remember, a BTC buy at 8200 with more confidence we're bullish is better than buying at 6700 with a more bearish outlook. Be smart and you'll be fine.
Its going to be an interesting next few days!
Good luck!