Last week, after a devastating move that shook the market violently up and down for a 7% move in just a few short minutes, bitcoin saw a major sign of strength as it proceeded to have a slow, but steady markup where it managed to establish a local high in the $6,800s:
Figure 1: BTC-USD, Hourly Candles, Shakeout Prior to Markup
This shakeout forced the market to temporarily establish a new monthly low in what could be argued to be a stop-hunt prior to the move to the $6,800s. Sitting atop its most recent rally is what appears to be a reaccumulation trading range shown below:
Figure 2: BTC-USD, 15-Minute Candles, Reaccumulation Trading Range
While it’s still early to tell, the current consolidation has some of the hallmarks of a classic reaccumulation trading range that, if realized, will likely lead to a continuation to the upside.
Currently, the market is rebounding from what appears to be a “spring” or a “shakeout” — an effort to create liquidity for large players. Part of the alleged shakeout includes testing prior resistance to see if it can properly hold as support. And, as you can see below, the spring tested the previous high and is currently holding support — a good sign for the bulls:
Figure 3: BTC-USD, Hourly Candles, Spring Testing Resistance Turned Support
So where does that leave us? While it is pure speculation at this point, if we see a strong round of buying, the first immediate test would take us to the top of the current trading range to test the $6,800s again. If the reaccumulation trading range proves to properly consolidate, a break to the upside is expected that will surely have us testing our macro descending trendline:
Figure 4: BTC-USD, 12-Hour Candles, Macro Descending Trendline
If
