The trader Илья Мещеряков explains the current market situation.
Early February has seen the crypto market continue the trend that began at the end of last month. Bitcoin remains in a global flat, its dominance index is falling and, at the time of writing, sits at 61.5%.
Over the past three days, BTC has traded within a local upward price channel, reaching a strong resistance zone marked in the previous review — $38,700–$40,000. Currently we see a rejection at the lower boundary of this zone and a break from the price channel to the downside.
Although such a breakout is often a false signal and the price may attempt again to break through $39,000, in the medium term this is a strong signal of downside. This is also evident on the hourly chart, where buyers reacted at $38,700, leaving a large upper wick on the hourly candle.
The ascending price channel and the proposed zone for accumulating buy-stop orders. The hourly chart BTC/USDT on Binance from TradingView.
On a smaller time frame, the Head and Shoulders pattern is visible; a break of the neckline would confirm the bearish movement. The initial break of the neckline has already occurred, and we may see a seller squeeze and a fall to $34,700 — the pattern’s target, about $2,000 in height.
Globally BTC is in a phase of uncertainty — buyers and sellers alternately seize the initiative, and everything should be decided at the moment of breaking through either $30,000 or $42,000. Given the current length of the consolidation and its range ($12,000), the move could be very strong—around $15,000, in the trader’s view.
This implies we could see prices well above $50,000 in the long term. However a downside breakout of the consolidation could lead to a protracted correction.
The Head-and-Shoulders pattern on the Bitcoin chart, and its targets. The five-minute BTC/USDT chart on Binance from TradingView.
Short-term traders have several options in the current price action of Bitcoin:
- breakout-and-retest strategies on local support and resistance levels;
- trading altcoins — many offer clear trading setups.
Long-term traders are better off simply watching how the market unfolds. They may also take note of other coins that hint at an “altseason.”
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