I think we are at an important point now. Maybe even the coming hours could be decisive for the direction of the coming month or two.
btc usd have a range now between 3800 and 3940, since the bears failed to break the 3800 yesterday and the bulls failed to break the 3940 a few days ago.
Yesterday we could see LTC' and ETH' getting very weak, breaking low time frame support. It also looked like Bitcoins 3800 would break, there were a few attempts even at the low, but they all failed. Since then, LTC' moved up quite strong again and ETH' a little bit. The whole crypto market (without Bitcoin ), the chart on the left, has moved up quite well since yesterday's low. After the break of that wedge , the drop and now the retest, it is starting to look like the market maybe doesn't want to drop. It is still below that red resistance, which is THE level to break, but if bears were in full control, we usually see it drop faster than this. Not sure yet, but maybe the bulls are up to something. I am thinking this, because the Open Intrest on Bitmex went up a lot the past days. Almost at 500 mil now. I find it a bit remarkable, to see so many buyers (compared to the past 3/4 months) while the market is at a dangerous price and at a weak spot as well. Could be meaningless and just a lot of big crazy buyers trying something, but i give benefit of the doubt to the bulls now. Also because that 3800 simply did not break yesterday, even thought volume was decent at that moment.
Anyway, chances are very high to see a big move soon, up or down. The 3800ish seems to be a very clear level now, so if that one breaks, we could see a big drop towards the 3500 even. Past weekend i thought a correction to 3700ish would still be a normal/healthy one, but with the OI this high, i don't think the drop will stop there if the 3800 breaks. On the upside, same story. Since OI is this high now, it means a lot of shorts are in play now with probably a lot of stops starting above 3940. So i think if that level breaks and seeing it getting above 4000 (with normal buying and not a short squeeze) while volume increases on the way up (most important factor), we could see a big rally happen. Maybe even above the 4200.
So there are some uncertainties, but one thing i am sure of, if we see a touch of 4200 again, even if it gets rejected at first, if will break eventually. Low time frame, i would keep a close eye on ETH'. If that one breaks up on the lower time frame, could be a big sign. Broke that blue curved line, but not yet a real break out. To be clear, the bearish wedge is still in full play here, Bitcoin' has a similar one which is even weaker. So between 3800/3950, anything can happen. Break of 3800 is probably a big sell signal. If we do move up, keep an eye on volume , if that doesn't increase on the way up, it can still be a fake move. Really need to see a fight on the way up, i am saying this, because those were the only real rallies we have seen the past months.
