Artist: The bearish trend that started at 72k has finally ended

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June ends! July begins!

The market is confusing. This article is a possible path or idea I have sorted out based on current market data:

BTC changed its previous trend of shrinking and sideways trading over the weekend, and instead maintained a stable and small increase. With the help of the CME futures opening gap at 6:00, it broke through the range high of 62,500.

Higher highs and lower lows indicate that this round of bearish trend that started from 72k has finally ended!

Since we judge that there may not be a lower price in the short term, we have to look at it from a larger perspective. From the daily chart, BTC is currently tending to move towards a converging triangle pattern. As shown in the figure, the highs are indeed gradually decreasing, while the lows are gradually rising;
image

Generally speaking, the converging triangle pattern will often break out when it is one-third of the way through. This turning point is around October this year.

In other words, if this converging triangle pattern is confirmed by the collective consensus of the market, then the large range of fluctuations we will experience next may continue for another 3 months. . .

It really kills trend traders. On the other hand, the longer the convergence and shock, the stronger and more persistent the new trend will be. When this shock lasts for more than 200 days, it will inevitably lead to a trend on the weekly and even monthly levels. It is actually quite simple and crude to understand. If it finally breaks upward, we will at least see a round of crazy bull market.

And if it finally chooses to break downward, then we can say without mercy that the bull market is over;

Back to the current market, if this convergence triangle is recognized by the market, then the short-term and medium-term will be very suitable for long, with two advantages:

1. The price is close to the lower edge of the triangle, so the stop loss is small;

2. The upper price of the triangle is around 71,000, and the profit and loss ratio is high;

The more important point is that if there is a strong rebound, the short liquidity above the current price is extremely sufficient, which means there is new fuel all the way, as shown in the figure:
image

There is no accumulation of long liquidity below, which means that the attraction for falling prices is not as strong as the attraction for rising prices;

Once this small-scale bullish trend starts, it will often move very fast. It is not over yet. Seeing a large amount of short liquidity near 72,000 makes me wonder, what if the next rebound directly breaks 72,000 and the upper edge of the triangle? Will there be a bull market at that time? It is impossible to say for sure. Please see the figure below. Theoretically, there is a possibility of a false breakthrough near 75,000 and forming a "rush back" distribution structure;
image

If a similar structure appears, on the one hand, it can re-stimulate the enthusiasm of retail investors in the market, and on the other hand, it can clear all the remaining short positions in the market. Large funds can use this part of the liquidity of closing positions and chasing longs to complete shipments, and build a "distribution range" when the price returns to the lower edge of the triangle!

So, although you see that I seem to be very bullish at the moment, but if 75,000 breaks out falsely in the future, then based on a long-term perspective, I am still relatively bearish, especially since I still believe that this bull market is closer to the bull market in 2019 rather than the big bull market in 2021, and the new highs can only be broken because of ETFs and the election.

I believe that the comments on the Internet this week should be extremely bullish. We should respect this sentiment. Short-term price fluctuations are far more affected by emotions than macroeconomics.

But compared with external information, we should respect prices and markets more; the high point of the 62500 range was broken, the weekly line closed with an incremental long lower shadow, and the short liquidity fuel accumulated in large quantities in the upper range;

In the face of this situation, is it appropriate to remain short and short? Obviously not! On the other hand, the total market value of stablecoins has stagnated, the incremental net inflow of ETFs has shrunk, and there are even frequent net outflows. The BTC narrative is insufficient and the expectation of interest rate cuts has been delayed again and again;
image

Based on this situation, can we really get out of a bull market? Where will the money come from? So my current view on the market is actually very simple;

In the short term, there is a high rebound to break the new highs for short liquidation, with the target at 75,000, but the long-term bull market is still very fake. If a false breakthrough "high and fall" structure appears near 75,000, then when the price falls below the trend line, the bull market is likely to end. Of course, this is my own personal opinion, and it is very subjective. Everyone has a completely different feeling about the market. You can refer to my ideas, but please don't take it personally and gamble.

If you have any objections, I welcome friendly discussions with good reasoning! That’s all. Thanks for reading!

Sector:
Halving Tokens
Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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