Charts may not tell us what comes next, but there are some scenarios to prepare for.
1) If the price breaks above the diagonal resistance line that has been established, some shorts will cover and some of those on the side-lines will scramble to buy. How far the rally goes is anyone’s guess and it could lose momentum quite quickly.
2) If the price drifts down to the 4,185 to 4,300 range (Coinbase) and selling volume doesn’t increase it would indicate that the capitulation occurred yesterday. If it bounces there, an inverse head and shoulders would be completed. This would lead to a stronger rally as the market would be more confident that for now a low is in place.
3) Of course, if there is no buying at the lower levels another leg down is one the cards.
It really all depends on volume and how aggressive buyers and sellers become at each level.
1) If the price breaks above the diagonal resistance line that has been established, some shorts will cover and some of those on the side-lines will scramble to buy. How far the rally goes is anyone’s guess and it could lose momentum quite quickly.
2) If the price drifts down to the 4,185 to 4,300 range (Coinbase) and selling volume doesn’t increase it would indicate that the capitulation occurred yesterday. If it bounces there, an inverse head and shoulders would be completed. This would lead to a stronger rally as the market would be more confident that for now a low is in place.
3) Of course, if there is no buying at the lower levels another leg down is one the cards.
It really all depends on volume and how aggressive buyers and sellers become at each level.