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So, I noticed a sharp increase in the price and, like many other traders, I got pretty curious!
Let’s see what’s going on here:
So, even though this is the Heikin Ashi candlestick chart, the doji does have significance still.
This usually indicates a potential reversal in the price.
That last candlestick on the Bitcoin 1D chart appears to be the ‘Long Lower Shadow’ formula.
To summarize, this is a very light reversal sign.
Let’s check some of the indicators to see if there’s anything else that can give us a clue what’s going on:
Yay Bull Run!
But let’s see what the other indicators say before giving any definitive verdict.
So, while these all sound like good signs — a sharp spike in these indicators usually is a sign that there may be some underlying manipulation going on with the price.
So, this is something that I would watch out for personally. This could be a small pump by some unknown entity. Check out the 1H chart below:
This is something definitely worth watching. Nothing definitive as of yet. Bitcoin has been channel trading pretty faithfully. Once the price runs up to that $6.9k mark, the resistance shrinks the volume of bulls trying to push the price upward.
Similarly, the support at $6.6k is pushing the volume ever lower whenever the price action goes downward.
· You could open up a short here. Leverage is always a risk though, even though the volatility appears to be shrinking. There’s also a chance that volume could pick back up. This doesn’t seem to be the case currently, but who knows.
· You could open up a short+long from this spot and close one when you see some definitive price movement. Since there’s such a small range of price action ($6.5k-6.8k), this probably isn’t the best strategy.
Based on the channel we see combined with the volume, a short (nothing crazy) isn’t a bad idea here in my opinion. With the volume quickly waning on the 1H chart and the price continuously failing at the top of this channel, it seems as though the resistance overhead around $6.9k will hold once more and may send the price back down to $6.5k.
This could be a solid short opportunity. Be careful when trading alts right now because of their increased volatility with the price goes down.
The run isn’t nearly big enough to be considered a ‘bull trap’, but the same concept remains. Don’t invest prematurely before this channel is broken. It looks like it’s more than likely that it won’t be broken though.