There is some aggressive chop in the Bitcoin (BTC) market, as the classic “bart head” trading formation erases most of yesterday’s gains. At the time of writing, the erratic chop is fighting to stay above what I call the “October line,” which forms the bottom limit of the October market structure taken out at the end of November. This seems to have become a critical area of much contention, and yesterday’s surge + fakeout + dump directly over this line does not seem to bode well for the bullish narrative.
We start on the hourly chart to understand what has happened. A sharp 10% gain yesterday was almost as sharply sold back off within just a matter of hours, forming the “bart head” formational familiar to Bitcoin watchers.
A subsequent counter-surge has already come after the dump, but volume is falling across the board suggesting that yesterday’s surge is already getting digested by the market.
On the 4-hour chart, we see that the erratic histogram emblematic of November’s price action has returned, with rapid reversals causing a sawtooth pattern on the indicator. What looked yesterday like the possible beginning of a short term uptrend, and with it a higher lower on the daily chart (see below), now looks less likely – but still not impossible.
But looking on the daily chart, we must again remember that the trend remains down. Price was rejected squarely yesterday near the 21 EMA, and the RSI isn’t putting in any clear signs of strength.
The histogram on this chart is again displaying and refracting the sort of erratic behavior we have seen on the Bitcoin chart since September, with smooth arches colliding with invisible walls of buying or selling. It is difficult to call any change in momentum direction in this environment.
The trend remains down on higher timeframes, though, and nothing has yet changed that. This is the one piece of information we should probably keep in mind above all.
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