Hello Traders,
In the last two years, Bitcoin has always bounced sharply from the oversold levels on the RSI. However, we always need to prepare for bearish scenario.
Looking at the 4 hour chart, I see indecision between bull and bear. If you pay close attention, we see inverse H&S (pink) and H&S pattern (orange) is forming at the same time.
Breakout below the the brown trendline will directly send us to the $6000 where we see confluent support, whereas target for the breakout above the blue line is $7116 where we see major resistance.
Currently, Bitcoin is trying to find higher low, and Bitcoin needs to find higher high in order to diminish the bearish scenario.
If you pay attention to the market crash around early April, the market structure is a little bit different this time. First of all, there was no H&S pattern previously.
Secondly, the height or the thickness of the Ichimoku Kumo was much thinner in early April compared to this time. (we see very thick Ichimoku Kumo this time, and statistically speaking it is highly unlikely that Bitcoin can penetrate Kumo with this thickness) If we want bull run, it is important for bulls to surpass $7000 before June 18th or else we will see more sideway movement or potentially further dip in next week.
In short term, my position remain bearish unless Bitcoin breakout from the blue trendline and go above the red Ichimoku line. I would not swing trade Bitcoin as the price action is highly unpredictable.
Happy trading.