Bitcoin markets tried to rally again during the day on Monday, but as per usual ran into a lot of resistance above. The downtrend line continues to remain intact, and at this point we are getting two extreme levels on the huge descending triangle. We will need to make a decision relatively soon as to whether this massive triangle breaks down. If it does, lights out. This would be an extremely negative turn of events as this has been such a supportive area just below, and after this many attempts breaking through their would open the floodgates. I think that almost certainly means that sellers would jump in and punish this market below the $5800 level, reaching down to the $5000 level.
As I’ve been saying for some time, the downtrend line continues to be the alternative scenario, and if we can break above it I think that would be a very bullish turn of events. With the shooting star that printed itself on Monday though, it does look very likely and I would point out that a majority of the gains over the last three days were done on Sunday, which certainly would’ve involved very little in the way of large flow. This is a market that simply has been very reliable if you are a short seller. That being said, there’s always two scenarios to every chart, so I think the short-term traders will be looking to sell this market and perhaps reaching down towards the $6250 level. Longer-term traders are waiting for break out or break down to get involved. Quite frankly, there just isn’t anything to get excited about in this market. I would keep my position size relatively small if I were you.
