The current market situation is explained by a practicing trader and founder of the project Crypto Shaman Vadim Shovkun.
Before analysing Bitcoin, it is necessary to look at the S&P 500 index chart. At present, the price has broken out of the wedge, settling below the $4,487 level and the Point of Control of the last upmove. Until the quotes rise above the indicated level, considering any medium-term longs in the cryptocurrency market is quite dangerous.
After an impulsive breakout from a two-month channel, the price moved into a sideways accumulation, returning to the range of $46 700-$50 100. At the moment, this entire zone should be regarded as a selling area. But while the price remains in the range, one should trade from the lower bound to the upper, and vice versa. A break above the level of $ 50 100 would push quotes toward new local highs, but a more likely scenario is a break below $46 700 and a move lower.
The overall technical background on Bitcoin is fairly negative. An impulsive breakout from the channel, a divergence on the daily timeframe, and shrinking volumes on the weekly timeframe point to weakness in digital gold. Given the fragile state of the stock market, short trades should be prioritized.
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