The BTC markets are testing a key resistance area, with price action appearing to be making a third point of contact with a major descending trendline dating back to December 2017.
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BTC On Cusp of Testing Major Trendline
The BTC markets appear on the cusp of a significant move, with price action testing a major descending trendline for the third time at the roughly $6,750 area. The trendline dates back to the all-time highs of nearly $20,000 USD, and makes an additional point of contact with late July’s local highs of roughly $8,500.
BTC/USD – Bitfinex – 1D
Should the markets break above the trendline, the next notable resistance areas are at approximately $7,500 and $8,500. Should the markets fail to produce further bullish momentum, it is likely that the price of BTC will retrace to test a fourth point of contact with the long-term ascending trendline dating back to March 2017 that completes the large symmetrical triangle in which BTC’s price action appears to be consolidating. Should the symmetrical triangle fail to hold, many analysts predict the possibility of a major wash-out down to the $4,500 area.
Short Squeeze Still Possible
Looking at the number of BTC short positions on Bitfinex, one can identify a 9.8% retrace in selling pressure from last week’s test of the all-time high area of nearly 40,000. Whilst it is still possible that the markets will produce a short squeeze, selling pressure has held with far greater resilience than when it first tested the 40,000 area in April – which saw a 40% reduction in selling pressure within the same daily candle that also posted historic open short positions.
BTC/USD Shorts – Bitfinex
